4 hacks to save money during the holidays

Organizing your holiday spending is a great way to increase holiday joy. Right now is a great time to plan out your budget for this year and get a jump on it for next year. These budgeting tips can help you maximize savings and make the most of the season. 

1. Set your spending limit in advance

It can be a lot easier (and more fun) to focus on the ends and not the means. Decide how much you want to spend ahead of time. Don’t worry, you’re in charge of your budget and you can make corrections later if you need to. The important thing is to focus on spending actual money without increasing your credit card balances.

Depending on who you ask, you and I are expected to spend somewhere between $875 and $1,600 on the holidays in 2023. Your personal holiday budget number might be higher or lower. 

Here's how to choose a number that works for you. 

• Do you have debt that you’re working to pay down? Consider setting a holiday spending limit that’s significantly lower than the amount you’d like to spend. Reserving cash for your debt strategy is a gift to you.

• Add up any savings you might already have earmarked for the holidays. 

• Calculate how much extra money you could find in your budget right now that you could add to that total. The Achieve MoLO app could help.

Once you have chosen a total spending limit‌, move on to the next step.

2. Budget spending in each category

Your holiday spending checklist likely includes more than just gifts. You might also be shelling out money for:

• Food and drinks for holiday gatherings

• Holiday decorations

• Gift wrap 

• Postage, if you're mailing gifts or cards

• Holiday travel if you plan to visit friends and family

Decide how much money to assign to each holiday spending category. These boundaries can help you avoid impulse spending. 

And here's a money-saving tip when buying gifts for kids: use the rule of 4. 

Under this rule, you'll limit kids to:

• Something they want

• Something they need

• Something to wear

• Something to read

It's a simple hack to avoid overspending and stay on top of your budget.

3. Automate savings 

Wouldn’t it be great if you already had the money on hand when you need it? That’s the magic of creating savings buckets. It may not feel Earth-shattering to save $20 or $30 a month in a special account, but if you do it every month, you could have $240 to $360 in cash after one year. Go ahead—set up a holiday savings account now for next year.

Saving all year-round is even easier if you set it and forget it. Automating is a hassle-free savings trick. Set up automatic deposits so your money goes where it needs to go all by itself.

There are many ways to set up automatic deposits. If you get paid by direct deposit, your payroll provider may allow you to send portions of your pay to different accounts. Or you can log into your bank to create an automatic transfer every payday, sending a certain amount from checking to savings. If your savings account is at a different bank, you could set it up as an automatic bill payment.

Up your savings game by using a high-yield savings account so you can earn a solid interest rate and grow your money even faster. Everybody loves free money, and the only way to earn interest on savings is to put money in the bank.

4. Try a no-spend challenge

A no-spend challenge is a commitment to not spending any money unnecessarily. That means no shopping, no going out to eat, no gift-buying. Basically, no spending on any nonessentials. 

Doing a no-spend for the 30 days leading up to Christmas, for example, could be a great way to stash money for the holidays fast. You'd do your best to stick to a bare-bones budget for the month, funneling the savings into a holiday savings account. 

Once December 1st rolls around, you could tackle your holiday shopping with cash in hand. 

Added bonus: a no-spend challenge is like a financial cleanse. Many people find that it’s easier to save money for a long time after the challenge ends.

The more you're able to save in advance, and the more organized you can be with your holiday budget, the easier you can breathe once it's time to get your holiday spending underway.