Implement This Simple Savings Strategy and Never Go Into Debt During the Holidays
Written by
Laura Bogart
Edited by
Kristen Mae
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For many people, letting your days be merry and bright during the holiday season requires a lot of bling. There are the gifts, of course — because you’ve got to go big. Then there’s the decor because that neighborhood contest won’t win itself (and let’s not forget the electric bills from your light-show extravaganza). And the food? You’ve got to serve a spread that everyone will talk about well into the new year.
All these efforts might make you the holiday hero, but sitting down with your credit card statements in January? Not so merry and bright. The debt you’ve racked up could make even the Grinch feel sorry for you. You’ll be paying it off until summer — just in time to start planning again.
There’s a way to get off the candy cane-colored roller coaster of holiday expenses. By following these simple steps, you can minimize your debt, and you might even have fun while doing it.
1. Climb the CD Ladder
Even if January finds your wallet feeling a little light after the holidays, you can still prepare for next year with a little planning and discipline. The CD ladder technique allows you to build savings gradually throughout the year while earning interest, so the money you’ll need is ready when holiday expenses roll around.
Here’s how it works: Instead of taking out multiple certificates of deposit (CDs) all at once, start small. Each month, or whenever you have extra funds, put money into CDs with staggered maturity dates. For example, you might begin with a nine-month CD in February, followed by a six-month CD in March, and so on.
By the time November or December rolls around, you’ll have CDs maturing just when you need the cash for gifts, celebrations, and other festive expenses. This strategy not only helps you avoid racking up holiday debt but also lets you feel like a savvy financial planner while saving for a season of generosity. (Bonus: seeing your savings grow month by month can be its own holiday cheer!)
2. Open a High-Yield Savings Account
Want to turn your house into a real-life Santa’s workshop — or at least make it look like one from the outside? You can, with the right amount of financial planning.
Start by opening a high-yield savings account as soon as you take down last year’s lights. Then, consistently contribute a little extra each month. By the time next Christmas comes around, you’ll have accrued enough interest to fund your winter wonderland without dipping into your everyday utility funds.
3. Watch Your Spending
They don’t call it the most wonderful time of the year for nothing. The holidays bring joy and creativity — decorating, cooking, and basking in the love of family and friends. And if you’ve set up your CD ladder and high-yield savings account, you’ll have enough money to plan the holiday of your sugar plum dreams.
However, just because you have the savings, that doesn’t mean you have to tap into them all for the holidays. If a short-term CD matures, consider renewing it for another term to let the money grow further. Remember, the holidays don’t have to mean a spending bonanza.
Instead of splurging on gadgets and gizmos, consider giving your loved ones a more lasting gift: the memory of spending quality time together. Plan a cozy meal, take a little one to a movie or a show, or visit your town’s light display. (Indeed, your neighbors might thank you for enjoying a light display somewhere other than your own home!)
By appreciating the smaller joys, you’ll create meaningful memories while keeping your budget intact. Those moments are priceless — and they don’t require overspending.
Want to make the holidays truly splendid without racking up debt that feels like a lump of coal in your stocking? Adopt a savings plan that combines CD laddering with a high-yield savings account. And remember: the holidays aren’t about the number of presents under the tree or how blinged-out your house is. They’re about the memories you make. Minimize your spending and focus on spending quality time with the people you love — it’s the best gift you can give.
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