The holiday season has a way of arriving faster than expected. One day you're enjoying the first cool days of fall, and the next you're booking travel, buying gifts, and planning holiday gatherings.
That's why early fall is the perfect time for a financial checkup. With the holidays being one of the most expensive times of the year, understanding where you stand today can help you make smarter decisions, avoid unnecessary debt, and stay on track with your financial goals
Here are five ways to help get your finances in order before the holiday season arrives.
Have you made the financial progress you hoped to make this year? Are you on pace to reach your savings goals? Have you added to your emergency fund or paid down debt?
Your answers should influence how much you're comfortable spending during the holidays.
For example, if you've fallen behind on savings goals or are carrying high-interest credit card balances, it may make sense to scale back your holiday spending this year. On the other hand, if you've met your financial milestones, you may have more flexibility in your budget.
The key is to base your holiday spending decisions around your actual financial position and not just what want you “want” to spend.
Instead, estimate your holiday costs before the season begins.
Consider:
Once you have an idea of what holiday expenses you’ll face, decide how much you can realistically afford to spend in each category.
Having a plan can help prevent impulse purchases and reduce the temptation to rely on credit cards when expenses start piling up. Spending more than you can afford during the holidays can lead to debt and interest charges, and could potentially damage your credit score.
Take a closer look at your checking, savings, and credit card accounts and review your recent transactions. Look specifically for spending that may no longer be providing value. Subscription services, streaming platforms, memberships, and automatic purchases can quietly consume a good chunk of your monthly budget.
Cutting out even a few unnecessary expenses can free up money that can be redirected toward your holiday spending. It’s a lot smarter to find room in your budget before the holidays than it is to face holiday debt in the new year.
This can be done in a few different ways.
One option is to open a dedicated savings account for your holiday expenses.
Another option (if your bank supports it) is to use sub-accounts. These are essentially digital “buckets” that allow you to earmark funds within an existing checking or savings account for a specific purpose. Bank5 Connect offers this with its “Goal Builder” feature in Online Banking and the Bank5 Connect mobile app.
While the smartest option is to avoid purchases that don’t fit within your holiday budget, you should give some thought to how you'll handle things if you do go over budget. If you plan to use a credit card, have a strategy for paying the balance off as quickly as possible.
A good rule of thumb is to avoid letting your holiday spending interfere with your long-term financial goals. The excitement of the season eventually passes, but debt often sticks around.
Making a plan now can help you enjoy the holidays without starting the new year with financial stress.
Taking a few minutes this fall to review your goals, build a spending plan, identify savings opportunities, separate your holiday funds, and prepare for expenses, can help you approach the season with confidence.
The sooner you understand where your finances stand, the easier it becomes to make decisions that support both your holiday plans and your long-term financial well-being.
That's why early fall is the perfect time for a financial checkup. With the holidays being one of the most expensive times of the year, understanding where you stand today can help you make smarter decisions, avoid unnecessary debt, and stay on track with your financial goals
Here are five ways to help get your finances in order before the holiday season arrives.
1. See If You're On Track for Your Financial Goals
Before setting a holiday budget, look at the bigger picture.Have you made the financial progress you hoped to make this year? Are you on pace to reach your savings goals? Have you added to your emergency fund or paid down debt?
Your answers should influence how much you're comfortable spending during the holidays.
For example, if you've fallen behind on savings goals or are carrying high-interest credit card balances, it may make sense to scale back your holiday spending this year. On the other hand, if you've met your financial milestones, you may have more flexibility in your budget.
The key is to base your holiday spending decisions around your actual financial position and not just what want you “want” to spend.
2. Create a Holiday Spending Plan Now
One big mistake people make is not creating a holiday budget, or creating one after they've already started spending money.Instead, estimate your holiday costs before the season begins.
Consider:
- Gifts
- Travel
- Holiday meals
- Decorations
- Charitable donations
- Seasonal activities
Once you have an idea of what holiday expenses you’ll face, decide how much you can realistically afford to spend in each category.
Having a plan can help prevent impulse purchases and reduce the temptation to rely on credit cards when expenses start piling up. Spending more than you can afford during the holidays can lead to debt and interest charges, and could potentially damage your credit score.
3. Review Your Accounts for Extra Savings Opportunities
If you’re unhappy with the amount your holiday budget will allow you to spend, you can look for ways to cut expenses to free up some extra cash.Take a closer look at your checking, savings, and credit card accounts and review your recent transactions. Look specifically for spending that may no longer be providing value. Subscription services, streaming platforms, memberships, and automatic purchases can quietly consume a good chunk of your monthly budget.
Cutting out even a few unnecessary expenses can free up money that can be redirected toward your holiday spending. It’s a lot smarter to find room in your budget before the holidays than it is to face holiday debt in the new year.
4. Separate Your Holiday Funds
Separating holiday funds from your everyday spending money makes it easier to stick to your holiday budget, track progress, and avoid overspending.This can be done in a few different ways.
One option is to open a dedicated savings account for your holiday expenses.
Another option (if your bank supports it) is to use sub-accounts. These are essentially digital “buckets” that allow you to earmark funds within an existing checking or savings account for a specific purpose. Bank5 Connect offers this with its “Goal Builder” feature in Online Banking and the Bank5 Connect mobile app.
5. Make a Plan to Avoid Holiday Debt
The average holiday season lasts only a few weeks, but holiday debt can linger much longer.While the smartest option is to avoid purchases that don’t fit within your holiday budget, you should give some thought to how you'll handle things if you do go over budget. If you plan to use a credit card, have a strategy for paying the balance off as quickly as possible.
A good rule of thumb is to avoid letting your holiday spending interfere with your long-term financial goals. The excitement of the season eventually passes, but debt often sticks around.
Making a plan now can help you enjoy the holidays without starting the new year with financial stress.
A Little Preparation Can Go a Long Way
The holidays should be a time to enjoy family, friends, and traditions, not to worry about money.Taking a few minutes this fall to review your goals, build a spending plan, identify savings opportunities, separate your holiday funds, and prepare for expenses, can help you approach the season with confidence.
The sooner you understand where your finances stand, the easier it becomes to make decisions that support both your holiday plans and your long-term financial well-being.