9 Smart Money Moves to Make Before the Holiday Season Begins

Fall is in full swing, and before you know it you'll be battling the throngs during holiday shopping season.

It may be make or break for many retailers, but it can also be challenging for consumers if they don't do a little bit of planning. Making just a handful of minor financial and lifestyle moves before Christmas and other winter holidays hit can save you money and aggravation later.

Here are nine tips for getting yourself straightened out before the holiday rush.

1. Push Money Into a Savings Account

If you want to avoid racking up more credit card debt, it will help to have some cash set aside to pay for holiday gifts. Consider using an online savings account and making an automatic transfer from your usual checking account each month until the end of November. Even $100 a month saved between now and Thanksgiving will give you $200 (plus a little bit of interest) to spend.

2. Check the Sales Now

We all know about Black Friday sales, but the reality is that stores place deep discounts on items throughout the year. There's no guarantee that a particular product will be at its cheapest on the day after Thanksgiving or any other day leading up to Christmas. Remember that many stores will roll out Veterans Day and Columbus Day sales, and you may find great deals on clothing at the end of summer when stores are looking to unload inventory and bring in fall and winter items.

3. Pay Off Your Credit Cards

Holiday shopping can be a debt creator. The National Foundation for Credit Counseling reported last year that there is a 25% spike in the number of people seeking help with credit card bills in January and February. If you are already paying the minimums on cards or have high debt, the addition of holiday shopping bills can be crippling.

High debt can leave you at risk of maxing out credit limits. At the very least, your ratio of debt to available credit could rise, thus hurting your credit score. Pay down your current debts now, so that any new debt won't be adding to an existing problem.

4. Find Stores With Layaway

For people who want to avoid credit card debt, layaway can be a great option for holiday shopping. With layaway, you can put an item aside at the store and receive it only when it is totally paid for. Many stores offer layaway months before the holidays, so you can select items now and have them paid off in time. Walmart this year began offering layaway on September 2. Kmart has eight-week and 12-week layaway plans now, and Toys R Us has 90-day layaway contracts. One caveat: Some stores do charge fees for layaway services, so be sure to read the fine print before signing up.

5. Track Down Any Money Owed to You

Have you been diligent about seeking reimbursement for work-related expenses? Have you received all money you've earned from freelance work? Now is the time to assess what outstanding cash is due to you. If money is tight, this could help you afford the gifts you want this holiday season.

6. Max Out Your Retirement Accounts

If you have access to retirement accounts, try to put as much money in them now as you can. You can contribute as much as $18,000 annually into a 401K plan and $5,500 into an IRA. The closer you get to these limits, the better off you'll be in retirement. You have until Tax Day next year to max out these accounts, but it may be best to contribute generously now before holiday expenses hit.

7. Make Sure Your W-4 Is Up to Date

If you work for a company, you probably filled out a W-4 form when you were hired. This form tells the IRS how much in taxes to withhold from your paycheck. But it often needs to be updated, particularly when you have gotten married, added a child to the family, or had a significant change in household income. Now is the time to check your W-4 to see that you aren't paying too much or too little in taxes.

8. Do Some Tax Loss Harvesting

If you sold shares of stock at any point during the year, you may be on the hook for capital gains taxes. But you may be able to avoid a tax bill by selling other shares of stock at a loss. In essence, the loss may outweigh the gains. There's nothing wrong with taking the proceeds from a sale and investing right back into the market, as long as you're not investing in the exact same securities. It might make sense to do some tax loss harvesting now, before the holiday rush hits and you forget.

9. Get Your Cars in for Servicing

Wait, what do your cars have to do with the holiday season? Well, car repairs are often a big source of unexpected expenses. And the last thing you want is hundreds or even thousands of dollars in bills right when you're doing the holiday shopping. Get your car in now, and you'll avoid a hefty expense later. Moreover, you'll be less likely to have the car breakdown in unpleasant, winter weather.

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Guest's picture
Kyle Burbank

Great list. In regards to #5, I just learned that the state of California was holding $50 that a community college in Arizona owed me from 10 years ago (thanks, internet!). If I can suggest a potentially controversial 10th item: open a good cash back credit card. I actually just opened a new card for the holiday season since it offers 5% back on department store and Amazon purchases through the end of December — hopefully that helps save me some money this year.