How Women Are Building ‘Holiday Emergency Funds’ To Mitigate Over-Spending

Being fiscally responsible can benefit you in all aspects of life – especially during the holidays. Planning ahead to mitigate overspending will not only protect your pockets, it will help you manage your stress levels, anxiety and mental health.

Holiday “emergency funds” can help you stay on top of holiday shopping without breaking the bank. If you’re looking for a way to keep the holidays from getting the best of you, Her Agenda has gathered information on how to build your very own holiday emergency fund.

According to Saver Life, a holiday fund is money you’ve set aside to celebrate holidays and special events. You can use it for gifts, decorations, food, or any other holiday-related expenses. Often, when people think about a holiday fund, they only think of saving money for Christmas, but you can also use your holiday fund to help cover expenses associated with birthdays, anniversaries, graduations, or any other time you’re buying gifts or celebrating.

Having a holiday emergency fund is essentially like having money for “a rainy day.” You won’t have to scramble, borrow money, or stress because you’ve already put money aside for holidays that are inevitably approaching.

According to Saver Life, as you create your holiday fund, consider your holiday budget. How much are you willing and able to spend on different event types? 

To determine this, look at what you’ve spent in the past on gifts, decorations, food, clothes, and any other holiday items you’ve purchased. You can find this information on previous bank and credit card statements. Be sure the number you come up with is in line with your values and what you can afford. 

Furthermore, if you’re not sure how much you’ve spent in the past, setting a reasonable budget and sticking to it will be beneficial. Setting a goal and staying within range for birthdays, Christmas, and even graduations will help you prepare for what is to come.

Your holiday emergency fund should not be connected to your monthly expenses. Open a savings account, put money in a safe, or utilize a credit union. You want the money to be accessible, but not as accessible as your everyday spending account.

According to Make Money For Sure, to ensure consistent contributions to your holiday savings consider setting up automatic transfers from your primary checking or banking account. This automated savings approach will help you build your holiday fund steadily, without the risk of forgetting to manually transfer funds.

By creating a dedicated holiday savings account and leveraging automatic transfers, you can take a proactive step towards a stress-free and financially responsible holiday season.

U.S. News projected that Americans spent an average of $1,014 spent on holiday gifts last year. If possible, starting to save in January will give you ample amount of time to prepare for the coming holidays. Being proactive is the best tactic to practice while securing a realistic holiday emergency fund.

U.S. News also suggests shopping around for a high-yield savings account with a competitive annual percentage yield (APY), no minimum balance requirements and no monthly or annual maintenance fees. Capital One’s 360 Performance Savings currently comes with a 3.60% APY and doesn’t require a minimum deposit or maintenance fees.

The higher the APY and the lower the costs, the more you’ll earn on your holiday savings as they sit in the account.