We Think This is the Best Way to Save Money for Christmas

When the holidays roll around, we all think about what we can do to save money. Let’s face it – it’s easier to make those holiday purchases if you’ve made a serious effort to save money beforehand.

At Addition Financial, our members often ask us this question:

“What’s the best way to save for Christmas?”

That’s a question we love to answer because we feel strongly that there is one way to save for the holidays that’s better than anything else we’ve tried.

The Best Way to Save for Christmas

Saving money can be a challenge for some of us, but we think the best way to circumvent the urge to spend the money you want to save is to automate the process.

What do we mean by that? Well, first, let’s talk about a scientific principle called automaticity. The definition of automaticity is:

The ability to perform tasks automatically without occupying your brain with low-level details.

In other words, automaticity is about forming habits. When you have the habit of working out in the morning, for example, it becomes less likely that you’ll skip a workout simply because you don’t feel like doing it. The same thing is true of saving money for the holidays.

If you make saving money a habit – and turn it into an automatic response – then you won’t have any difficulty saving the money you need to pay for all your holiday gifts. And the great part is that you can start doing it at any time!

How Does Automaticity Work for Saving Money?

You’re probably familiar with the idea of automation. You know there are tools available that can automate simple processes. For example, you can put documents in the automatic feeder of a copy machine and watch as they get pulled into the machine, without any assistance from you.

Automation can go hand in hand with automaticity – and it should. There are financial tools you can use to help you save money.

Here’s an example. You could set up an automatic transfer from your checking to your savings account that happens on the first of every month. Automation will ensure the money gets transferred every month. You don’t need to remember it because it happens like clockwork.

Because automaticity is a psychological principle, it can also work in forming the personal habit of saving money. The more accustomed you get to saving, the more automatic it will become.

Over time, the habit of saving will become part of who you are – and that’s true whether you’re saving money for the holidays or for a down payment on your first home.

The Holiday Season Financial Preparation Guide for Families

Tips for Using Automaticity to Save Money for the Holidays

Now, let’s talk about some specific things you can do to make automaticity work in your favor as you save money for the holidays.

  1. Set up an automatic transfer as we talked about in the previous section. You have the option of setting up a repetitive transfer from your checking to your savings account when you get paid. Addition Financial’s holiday savings accounts make it easy to set up recurring transfers.
  2. Make a commitment to saving cash when it comes your way. A lot of people have a change jar they use to save loose change. You can then take it to the bank or to a Coinstar machine. (Hint: if you use the Amazon gift card option, you won’t need to pay a fee!) Or you could commit to saving every five dollar bill you receive, or even every ten dollar bill. That money can add up quickly!
  3. When you receive a monthly bill and it’s less than expected, pay it and then transfer the amount left over in your budget into your savings account. For example, say you have $100 budgeted for your electric bill and you pay only $81 in a given month. Simply transfer the $19 difference into your savings account.
  4. Calculate how much money you spend on eating out every week, then try cutting back and putting the difference into savings. Some people spend $10 a day or more on lunch when they’re working. If you bought food to bring for lunch, you could save half of that or more every week.

We hope you get the idea. Automaticity is all about creating the habit of savings, and that’s why we believe it’s the best way to save money for Christmas. What we like most about it is that your savings can pile up quickly. Even if you start just a few months before the holidays, you can have a substantial amount saved by the time you start shopping.

Everybody’s different, but we think using automation and automaticity is the best way to save money for Christmas.

If you want a place to put your holiday savings, click here to check out Addition Financial’s holiday savings accounts.

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