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Planting the Holiday Savings Seed

Planting the Holiday Savings Seed

The holidays are in full swing. For many of us, that means increased spending as we shop for decorations, load up our fridge for unexpected and expected guests, and scour the malls and internet for the perfect gifts. While we can trim our expenses just as we trim our Christmas tree – by buying items on sale or simply not letting them appear on our list in the first place – there’s no getting around the fact that the holiday season often means more money flowing out than coming in.

It’s hard to put the brakes on holiday spending entirely, especially when it seems we are bombarded by temptations all around us in the form of sales, familial demands and cultural inclinations to buy, buy, buy.

[Related: Advanced Strategies for Financially Savvy Women]

So here’s an attempt to be a lone but hopefully resounding voice in the sea of “holiday buying lure” that encourages you to save this month and into the New Year. Though familiar, each of these areas will plant the savings seed that will keep giving long after the flurry of winter celebrations come to a close:

1. 401(k) and IRA – 2016 Contributions

With a deadline of December 31, there’s still time make a contribution to your retirement plans this year. 401(k) employee contribution limits are $18,000 ($24k if over age 50). For IRAs, the amount you generally may contribute $5,500 ($6,500 if over age 50) each year. Make sure you check with your professional advisor to ensure eligibility and appropriateness.

2. 401(k) and IRA – 2017 Contributions

Contribution limits remain the same in 2017. Take time this month to review your elections to see if they still make sense within your financial plan and any changes that may alter it in the new year, maximizing the contributions whenever possible. Keep in mind that there are a myriad of retirement plans, not just 401(k)s, for entrepreneurs, other business owners, etc., so check which type of plan you have and the specific limits for each (

3. 529 Plan

Higher education costs continue to skyrocket. If you have a child or other beneficiary with plans to attend college, it’s a good idea to consider opening and contributing regularly to a 529 Plan. While each state varies on how much you can contribute over a lifetime, you (and any other family members, friends, etc.) may contribute up to $14k ($28k for married couples) per child per year, or up toe $70k (or $140k for married couples, pro-rated over a five-year period, to an account.

4. Flexible Spending Account and Other Employee Benefits

Your employer may offer a Flexible Spending Account benefit – allowing employees to put pre-tax income into an account set aside for health care. The FSA contribution for 2017 has risen to $2,600. If you haven’t already made your elections for 2017, make sure you contact your Human Resources department to see what’s available to you. There also may be other tax advantageous benefits, such as qualified transportation benefits, Health Savings Accounts, etc. that may help you save money in the new year.

5. Savings Account

Do you have a specific account for savings, or is everything lumped into one checking account? While interest rates have been historically low over the past years, making it difficult to earn money while the cash sits in your account, it’s still a good idea to have a separate account dedicated to savings as opposed to your every day expenses. It could be earmarked for a special savings goal – such as an emergency fund, traveling, or estimated taxes – or you can keep one general account open for all savings. Online savings accounts, such as American Express Savings or Discover Bank, have rates around 0.90-0.95%. While still low, you not only earn some money, but having a separate account encourages you to save toward a specific goal, or at the very least, not spend it on daily bills and purchases.

6. The Gift of Money

Related to above, a long-standing tip is to ask for the gift of savings or debt repayment. If you’re fortunate enough to have loved ones inquire about what they might be able to get you this year, opt for a “donation” directly to your savings fund or loan repayment, instead of a new sweater or kitchen gadget that will likely collect dust by March.

7. Kids’ Bank

One of my favorite gifts to encourage kids in particular to save is the Moonjar. It has three components for “saving, spending and sharing” that helps introduce children to the concept of allocating money to each of these areas, with other tools and support to accomplish this.

8. De-cluttering

Finally, a wonderful and easy way to get into the mindset of saving this holiday season is simply the act of de-cluttering. While this takes the precious resource of time – something that you are probably feeling that you are lacking these days– it’s well worth it. If you can’t get to this over the next week, set aside a day between Christmas/Hanukkah and New Year’s to clear out a least one room or major closet, donating items you don’t need and tossing others that are too worn or no use. What does de-cluttering have to do with savings? Practicing minimal living and de-cluttering a la Marie Kondo will have major benefits as you enter the new year. With less “stuff” and a cleaner space, not only will your mind instantly feel clearer and more motivated in general to curb indulgent behavior; you will also be significantly less inclined to bring items into your home that will cause things to look cluttered again. You will think twice before buying things. A great strategy for long-term savings in 2017! 

To that end, to all, Happy Holidays and happy savings!

[Related: 5 Things You Need to Know About Your 401-K or IRA]


Jennifer Faherty is a Certified Career and Executive Coach specializing in helping women define success on their own terms, make the best career decisions for themselves, and find work they love. For more information, and for help saving and getting your personal finances in order in 2017, inquire about services at or sign up for our updates at

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