By Rudy Maldonado, Vice President and Branch Manager (MUFG Union Bank, N.A.)
Every year, it seems stores start playing holiday music and decorating earlier than the year before. By mid-summer, most national monthly magazines have already completed their special holiday issues, and many financial advisors agree that this a good time to start saving for the holidays. Whether you are setting a gift budget, making travel plans or scheduling a holiday party, you’re more likely to have a realistic view of your finances and stay within your budget when you aren’t under the pressure of a tight deadline. In addition to preventing a post-holiday spending hangover, getting an early start on your financial holiday planning may also allow you more time to enjoy the season. Here are some suggestions to consider:
Make a list and check it twice
Develop a list of the people you usually buy gifts for during the holidays. Next, make a list of items you normally buy this time of year, such as greeting cards, contributions to charitable organizations, holiday meals and traditions, travel and entertainment. Take inventory of what you already have – wrapping paper, decorations, stored gifts, etc. Consider selling surplus items online or at a yard sale for extra cash to add to your holiday budget or savings.
Develop a budget and save
Once you’ve taken inventory, determine the maximum you can spend on each item to help determine your budget and the amount you will need to save over the next few months. It might be helpful to look through last year’s receipts or billing statements to get an idea of how much you spent. Developing a spending plan before you begin shopping may also help you avoid impulse buying.
To help boost your holiday savings, establish automatic transfers or have part of your paycheck deposited into a targeted savings account. You might also consider additional seasonal work to bring in more cash, or cut back on your everyday spending. If you’re still coming up short, early preparation will allow you time to manage the expectations of your family and friends accordingly.
Shop early and take advantage of sales
We all know that seasoned gift giver who completes his/her holiday shopping by September. Start comparison shopping now for gifts, and keep an eye out for coupons and online deals. Look into high-demand items that might be more expensive and difficult to obtain during the holidays, and make those purchases when you have the available cash. It may also be prudent to take advantage of end-of-summer sales, Thanksgiving or Black Friday specials and other opportunities to save.
Keep track of purchases
Keep your holiday gift list handy by considering a smartphone application such as Santa’s Bag-Christmas Gift List (available through the AppleApp StoreSM) that helps manage gift recipients, shopping and budget lists. Designate a secure spot in your home or garage where you can store gifts and other items, and if you also get a jump on wrapping, be sure to label each gift for easy identification.
Giving handmade gifts can help save on your holiday budget, and starting now will give you plenty of time to get crafty. For example, if you have a green thumb, planting an inexpensive bulb in the fall will often provide you with a beautiful blooming plant to give in time for the holidays. For other DIY ideas, there are numerous resources online.
Book travel early
Fares often increase closer to the holidays, so try to book airline and hotel reservations in advance for potential savings. You will generally get a lower rate if you purchase at least 21 days in advance, so do some research now. Check with your employer or organizations you may belong to, such as AAA and AARP, to explore travel discounts, or visit online travel sites that might also help you save.
The foregoing article is intended to provide general information about preparing financially for the holidays and is not considered financial or tax advice. Please consult your financial or tax advisor.
About MUFG Union Bank, N.A
Rudy Maldonado is a vice president and branch manager of MUFG Union Bank, N.A.’s, Coronado Branch. MUFG Union Bank, N.A., is a full-service bank with offices across the United States. We provide a wide spectrum of corporate, commercial, retail banking and wealth management solutions to meet the needs of customers. The bank also offers an extensive portfolio of value-added solutions for customers, including investment banking, personal trust, capital markets, global treasury management, transaction banking and other services. With assets of $106.7 billion (USD), as of March 31, 2014, the bank has strong capital reserves, credit ratings and capital ratios relative to peer banks. MUFG Union Bank is a proud member of the Mitsubishi UFJ Financial Group (NYSE: MTU), one of the world’s largest financial organizations with total assets of approximately ¥258 trillion (JPY) or $2.5 trillion (USD)1, as of March 31, 2014. MUFG Americas Holdings Corporation, the financial holding company and MUFG Union Bank, N.A. have corporate headquarters in New York City.