We’re only in March, why on earth would you start worrying about December already? It actually makes a lot of sense to start planning for your festive season early, though. The end of the year will sneak up on you sooner than you think. If you’ve given yourself enough time to save, you won’t have to stress about money when you should be relaxing.
Here are some ideas.
Globetrotting? Work out what your holiday will cost
When you add up the expenses of accommodation, transport, entertainment and food, you’ll quickly realise that a December holiday is a pricey exercise. That doesn’t mean you shouldn’t have one, it just means that you should be upfront with yourself about how much it’s really going to cost, and plan accordingly.
If you’re planning to fly somewhere, consider paying for your tickets now to stagger the expense. (Just make sure you understand the cancellation policy!) Planning to drive? Bear in mind that the fuel price will probably have gone up by December, so add an extra 10% or more to your transport budget. And if you’re visiting another country, remember to cost any necessary visas and travel insurance.
Staycationing? Don’t underestimate how quickly things add up
Big family gatherings are part of the December holiday fun. But catering for them can hurt your pocket! Also think of the activities you’ll want to do and the places you’ll want to visit. Try to jot down your potential food and entertainment expenses and add them to the list.
If you celebrate, make sure to factor in your Christmas presents too. Gifts for everyone in a big family can make your credit card cry. Work out how many people you’ll need to buy presents for and set yourself a cost limit.
Right, you’ve got an estimate of what your December fun will cost. It looks like a lot! But don’t despair. This is where the planning kicks in. You’ve got nine months left including March — divide the total by nine and see what you’ll have to save each month to reach your goal. Can you save that much? If not, go back to your expense list and remove some items that might be a little too indulgent.
The easiest way to calculate how much you can afford to save each month is by using the Budget tool on the 22seven app. Log all your monthly expenses in the various categories and you’ll see what you have left over to save, then set up a debit order for that amount to come off each month.
How should you invest the money? Considering that you’ll need to withdraw it again relatively soon, it’s best to go for a low-risk investment product that offers a fair interest rate but also gives you instant access to your cash — like a money market account. There are many factors to consider, and it might be worth chatting to a financial advisor if you’re not sure.
Time flies, and there’s nothing better than putting your feet up in December knowing that you’ve covered most of your holiday expenses already. Come on, start saving now!