It may not feel like it as you battle 104 degree subway platforms and pray for this summer to finally end, but the holidays are almost upon us. And that means starting to budget for gifts, flights, feasts and all the other Yuletide trappings.
The National Retail Federation estimates the average American spends $796 on Thanksgiving and Christmas expenses, with $476 pegged to gifts for family and friends. If you need to travel for one or both of those holidays (not to mention New Year’s Eve), it’s going to cost you even more.
That’s a lot of money to come up with in a short amount of time. So, start planning now.
Make (and Keep) Your Budget
According to USA Today, 77 percent of people who set a holiday budget exceed it, though usually by no more than $100. Still, tracking your spending is especially important during a time filled with temptations.
“If your overspending means you have to skip a few nice dinners out post-holidays or make a few more cheap meals at home, then exceeding your budget hasn’t caused a major problem,” notes USA Today. “If your overspending forces you to not pay utility bills or only make minimum payments on your credit card, you have a bigger problem.”
Decide how much you can realistically afford, and make a plan for saving that amount between now and when you do your shopping.
You can set up a separate savings account with your bank, an online bank like Ally or via an app like Qapital to separate some of your funds for the holiday season. You can also make a separate travel fund (more on traveling below).
And of course, this will allow you to start looking for deals now, and spread some of the spending out over a longer time period. While you’re shopping, use apps like Digit, Tip Yourself or IFTTT with Qapital to save some money for yourself.
Don’t forget about small gifts for your mail delivery person, trash collectors, apartment super, kids’ teachers, etc.
Be Smart About Travel
FareCompare, a flight comparison website, told USA Today that the best time to book flights for the fall is around Aug. 27, “when the high summer fares drop for weekends as well as weekdays, and lower fares will rule until a big jump for Thanksgiving.” Start your search then (using the Incognito browser) or try an app like Hopper to track prices on flights, and consider being flexible with your plans, if you can, to score the best deals.
If you’re traveling by car, use an app like GasBuddy to find the cheapest gas in your area. Some credit cards, which we’ll get into below, also offer double cash back on gas purchases.
Max Out Your Rewards
If you’re going to be traveling a lot or buying expensive gifts, make sure you’re maxing your points accumulation and cash back. In fact, it could be worth looking into a new card.
Consider a travel card like the Capital One Venture card, the Chase Sapphire Reserve or a specific airline’s card if you’re flying for both Thanksgiving and Christmas (or just have an expensive flight). If you use those cards for purchases totaling $3,000 to $4,000 over the next three months, not only will you rack up rewards, but you could earn enough bonus points to pay for your flight home or to your in-laws come Christmas.
Other basic cash back cards, like the Citi Double Cash card, offer pretty good rewards rates across the board. If you’re planning to do a lot of your shopping on Amazon, the prime rewards credit card and the Amazon store card offer as much as five percent cash back on purchases. Chase, Citi and Costco offer pretty good rewards on gas.
Of course, you’ll want to be careful charging everything to your card (that’s why you made your budget), but used strategically, you could reap the holiday season rewards.