Here’s Why You Should Build an Emergency Savings During the Holidays

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Save more, spend smarter, and make your money go further


When the holidays come, they hit us back-to-back! Costumes and candy for Halloween, dinner on Thanksgiving, then gifts for Christmas, Hanukkah, and Kwanzaa. Don’t even get me started on all the money spent traveling to get the whole family together! 

That’s the thing about the holidays– yes, it’s a time filled which joy and cheer, but it’s also filled with pressure to overspend! 

Saving money is tough all throughout the year because there’s always something that needs our financial attention. While that’s the case, most Americans still do find a way to get gifts for their close friends or take a trip to see their family because the holidays mark a special time that only comes around once a year. 

When you’re making a list of people to get gifts for, add your name at the very TOP! Now, you have a list of people sorted by priority, for you should shop for. Go the extra mile by listing down a budget for each gift. This helps you set goals that are both numeric and time-based. Think something along the lines of: “my goal is to buy my mother a gift for under $100 by Christmas Eve.” When you say, write and commit to these very specific types of goals, you are far more likely to actually save the money needed to accomplish them! 

Behavioral psychology studies have shown that when you attach real outcomes to a goal, you’re more likely to work towards accomplishing it, compared to if you had a goal with no tangible outcomes. That’s why you’ll likely be able to set aside the $100 for your mother’s Christmas gift even if you’ve been strapped for cash lately. 

Pro tip: combine both types of goals and tackle them at the same time for a better chance of success at the less tangible goal. 

In other words, if you already have a list of items to spend on during the holidays, add your emergency fund at the top of the list (or at least get started on your emergency fund). Generally, saving up money in an emergency fund is hard for most people because of all our existing financial responsibilities and life throwing us curveballs. However, what really makes it difficult to save is that being prepared for emergencies is a state of being, not something tangible that we can touch like a bunch of gifts. It’s easier to prioritize giving gifts to your loved ones than it is to prioritize giving yourself the gift of freedom from financial stress. 

Financial stress happens all year round. It is even worse around and after the holiday period. People tend to overspend, then use the post-holiday months trying to dig themselves out of debt or save enough money to make up for all the holiday spending. 

What if instead of worrying about post-holiday problems, you can make yourself more secure by having an emergency fund set aside? This should be the real goal because believe it or not, the list of post-holiday problems people face is not short. For example, driving accidents increase during the holidays. From alcohol-related car crashes and weather-related accidents caused by texting or road rage, the risk of getting injured in a car wreck increases when celebrating Thanksgiving all the way through the new year. We all know what this can lead to… hefty post-holiday car repair bills and/or medical bills. 

Okay, now you agree that the holidays are a sensible time to kickstart the savings, right? How can you get started on building an emergency fund during the holidays? Here are a few strategies to make it happen: 

Opt for doing a Secret Santa instead

In my family of nine siblings, we have cut holiday costs tremendously by drawing names out of a hat on Thanksgiving so each person only needs to buy one gift rather than multiple gifts for everyone! This way, we can focus on saving a bit more and getting the kids in the family something more special. Limiting the number of gifts you need to put on your list is an immediate way to cut costs and eliminate the time you need to spend shopping!  

Be smart about the experience of shopping 

While it sounds fun to go to the mall and shop around for the perfect gift, I always prefer to skip the stores altogether and just shop online. It’s a major way to save because you don’t have to spend on gas, parking or childcare. Plus, you can shop anytime and anywhere you want, even in bed in the middle of the night when everyone’s asleep! Comparison shop at deal-oriented sites and don’t forget to include the cost of shipping and handling in your budget! Try to only shop at stores that offer free shipping throughout the holidays or shop on Cyber Monday (the Monday after Thanksgiving).

DIY as much of the food, decorations, and gifts as you can 

Baking instead of buying homemade gifts can be much more special. You can also choose to reuse or DIY ornaments and decorations rather than spend on store-bought decorations. There really is no need to go all out in making your house look or feel a certain way for such a temporary time-frame when saving money will bring much more of a lasting impact on the feeling you get daily knowing that you’re not financially vulnerable after the holidays. There are an endless number of examples of DIY projects on Pinterest and other sites that can give you the inspiration you need. Also, instead of spending money on tickets and snacks at the movies, stay indoors and play some holiday music while crafting decorations and bonding with your family in a much more interactive and personal way. You’ll save money and spend time with loved ones, it’s a win-win! 

Spending less is just one part of a successful long-term financial plan. If you put away the money you save during the holidays into a savings account for your emergency fund, you’ll definitely be prepared for those unexpected expenses if and when they arise. People with a savings plan are two times as likely to save successfully as those with no plan in place.

Save more, spend smarter, and make your money go further