FEATURE — Holiday saving can seem like a daunting task, but with a little bit of planning and some creative strategies, it can be done. Here are ten holiday saving tips to help save money and make the dream vacation a reality. Whether it is saving for the holiday season or for a holiday abroad, these tips will help benefit any holiday savers’ bank account.
Maksim Chernyshev via Scopio, St. George News
Cut Down on Recurring Costs
One of the best ways to save money for a holiday is to cut down on recurring costs. This could mean canceling unused subscriptions, renegotiating cable or internet packages, or finding cheaper ways to do things like heating the house or getting around town.
By making small changes to regular spending habits, holiday savers can free up some extra cash to put towards a holiday fund. This involves shifting your mindset to be more frugal when needed.
Example: If someone currently pays for a gym membership that’s not regularly used, cancel it and take up an outdoor hobby or home workout instead. Deciding to cancel a $25 per week gym membership and working out at home instead two months before the holiday will save $200.
Bring a Packed Lunch to Work
One of the best ways to save money for a holiday is to bring lunch to work instead of buying food from a restaurant or café. Not only is this cheaper, but it can also be healthier since there is a control on what ingredients go into the food. By packing a lunch each day, holiday savers can easily save $10 or more per week, which adds up to a lot of money over time.
Example: Bringing a packed lunch instead of buying from restaurants/cafés every day will save an average of $10-$15 per workday, which adds up significantly over time! ‘Lunchflation’ is real!
Rent Out a Living Area While on the Holiday
Another great way to save extra money for a holiday is to rent out a living space while away. This could mean subletting the apartment, renting out a room on Airbnb, or even having friends or family stay in the home. Not only will this bring in some extra income for the holiday fund, but it also means less worry about finding someone to take care of the plants and pets while away.
Example: Renting out a room on Airbnb for a week while on holiday can cover 100% of your rent expense and then some! Depending on what the space is valued at for that amount of time. Remember that rates go up during the holidays, which makes this an even better option.
Start Holiday Saving Early
In most cases, it’s much easier to put away $50 a week for eight weeks than putting away $100 in 4 weeks. It’s obvious but also immensely powerful.
Plus, the earlier the holiday goer starts saving, the more time the money has to accumulate and earn interest in a savings account. So start planning for a holiday well in advance.
Record All Expenses
The holiday saver needs to start tracking expenses so they can see where their money is going. This will help them figure out where to cut back and save more money for a holiday. There are a number of different ways to track daily expenses, so find one that works best and start tracking today.
Some helpful tips:
- Keep a budget diary where you record everything you spend each day.
- Use a spending tracker app on a phone or computer.
- Create a spreadsheet to track weekly expenses.
By tracking daily expenses, holiday savers can see where they can make some changes and save more money for their holidays. Naturally, they will be more inclined to make more prudent decisions, such as buying cheaper food. Remember, what gets measured, gets improved!
Do the Research Before Leaving Home
Imagine a holiday that someone has been on in the past. Now imagine they went on a return trip straight away, same place, time duration, and same general plans. Imagine how much cheaper it would be the second time! They’d not have fallen for the same traps as they did the first time and squandered that money, making bookings that didn’t add enjoyment to the trip.
By being diligent in their planning ahead of time, the more prepared they are, the better equipped they are to make good decisions, i.e., trade-offs on spending vs. the utility they receive back on goods and services.
Example: Booking transport plans a month in advance will most likely yield a more favorable return on investment than booking on the day.
The Latte Effect
The Latte Effect is a term coined by financial expert David Bach to refer to the small purchases people make on a daily basis that add up over time. This could be buying a daily coffee or grabbing lunch at a restaurant instead of packing it from home. Consider cutting back on these small expenses and putting that money towards the holiday fund instead. Every little bit counts!
Example: Saving $3 a day on coffee adds up to over $1,000 a year – that’s a great holiday fund right there!
Cut Back on Nightlife
There are a few reasons why it’s a good idea to avoid going on late nights out before going on a holiday. For one, going out drinking or clubbing every night can be expensive. And secondly, all that partying can also be exhausting, which isn’t ideal when you want to relax on holiday.
By cutting back on nightlife activities weeks ahead of the planned trip, the more money left over to spend on the holiday, with the added bonus of saving up some energy for all the fun things while away. So, when looking to save money and relax before a holiday, start cutting back on the nights out now.
Kick a Bad Habit
Most of us have a bad habit that, when kicked, will benefit our bank account and our health, mindset, and relationships.
The age-old example is smoking. Although cigarette prices have increased over the years, smoking is still an expensive habit. So by quitting smoking, not only can one save money on cigarettes, but they’ll also save money on healthcare and other related expenses.
Another great example is cutting down on take-out food, which can also result in a win/win for health and holiday savings.
Pay Yourself First
As Warren Buffett said himself, “Do not save what is left after spending, but spend what is left after saving.” If savers forget everything they know about saving money but remember this gem, they can go a long way.
In practical terms, this may look like the following. If someone gets paid weekly on Wednesday, then each Wednesday, they set aside 10% into a holiday saving account or stash it under a mattress. Then, the remaining money is used for food, entertainment, etc. As a result, they will hit their holiday saving goal much more consistently.
Make a Grocery List
When going to the grocery store without a list, people are more likely to buy things they don’t need. This means they’ll be spending more money than they need to and won’t be saving as much as they could. If they make a list, it helps them stay focused while shopping and only buy necessary items. This saves time and money in the long run, as they won’t make any unnecessary purchases.
Bonus Tip: Never go grocery shopping when hungry. Shoppers tend to spend more than they need, as they are more likely to give into temptation.
Make a Budget
In addition to recording all expenses, making a budget is the best way for holiday savers to save money because it allows savers to track spending and categorize their expenses ahead of time to see where they can make cuts. When they have a budget, it’s their own personal savings plan, and they’re less likely to overspend on things they don’t need. This means they’ll be able to save more of their money and have more money available for holiday spending.
Another reason why budgeting is a great way to save money is that it helps to stay organized. When they know where their money is going, they’re less likely to waste it on unnecessary things. This means that they will be able to save more over time and have more money available for holiday spending.
Other Ideas To Save Money Include:
- Use coupons and discount codes.
- Sell unused items.
- Switch to generic brands.
- Quit online shopping.
- Take public transportation or carpool instead of driving a car.
- Cut down on entertainment expenses (cable, subscription services, etc.)
- Eat leftovers for lunch instead of buying them every day.
By incorporating some or all of these ideas into their lifestyle, you can save money for holiday spending and instill good personal finance habits for the long run.
The best time to start holiday saving was ten years ago; the second best time to start holiday saving is now.
Written by CIARAN COUGHLAN for Savoteur, syndicated by Wealth of Geeks.
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