A few simple banking moves to make next year’s holiday brighter

Packing on a few pounds at the end of the year can be fixed fairly easily. Shedding fresh debt takes much more work. That’s why it’s best to avoid it in the first place.

From gifts to travel to putting elaborate meals on the table, holiday-related costs can add up quickly; consumers plan on spending just under $1,000 this year, according to a National Retail Federation survey. The key is figuring out how you’ll make room for those additional expenses without jeopardizing your financial health.

Although it may be too late to free up more cash for this year’s festivities, it isn’t too early to get a head start on 2017. Here’s a look at how a few simple changes can make a noticeable difference a year from now.

Automate your saving

You’ve heard it before: Saving money requires discipline, determination and a steely resolve. We’ll spare you another halftime pep talk.

A solid plan — and remembering to follow it — will serve you just as well. And because you can’t always rely on your memory, automated transfers from your checking to your savings account can be a big help.

Consider scheduling automatic monthly transfers of $50 — or whatever amount you can afford — to your savings account. Do that and you’ll have $600 by next December. That money can cover most, if not all, of your holiday travel, be it a plane ticket or a rental car and gas.

Eliminate bank fees

Whether it’s spending money on a movie that turned out to be a dud or ordering a pair of shoes that don’t quite fit, throwing money out the window is always frustrating. And that’s essentially what you’re doing when paying your checking account’s monthly maintenance fee, which could be as high as $12. Pair that with a couple of industry-standard overdraft charges of $35, and you’re shelling out over $200 in fees each year. But you can dodge these fees.

Many credit unions and online banks offer free checking accounts. And online banks tend to have especially consumer-friendly overdraft policies.

What does that mean? For one, the actual fee is lower. If you choose your bank carefully, you could also find one that charges no more than one overdraft fee per day. Other banks may hit you with as many as three or four; some don’t have any limits.

The $200 or so that you save here could go toward holiday meals or other miscellaneous expenses.

Open a CD

To determine how much you’ll be able to afford on gifts, evaluate your 2017 budget and think back to your past holiday spending habits. If you break out into a cold sweat, it might be time for a change. That’s where a certificate of deposit can come in handy.

Once you reach a figure, consider putting that money into a one-year CD, where it will earn interest and, more importantly, remain separated from your other savings and spending money. Removing that money before your CD matures will trigger early withdrawal fees, which should serve as additional incentive to leave those funds untouched.

Some banks ask for initial deposits of as much as $2,000. Don’t let that muddle your plans. Online banks and credit unions often let you open CDs with just $500, and some ask for as little as $1. As a bonus, savings rates at these types of financial institutions are typically higher.

When you shop next year, try to spend only the money that you kept in the CD. Doing so will prevent you from going overboard and mitigate any guilt you might feel; you’ve planned ahead and can spend accordingly.

Plan ahead, avoid costly missteps

Your net worth probably won’t skyrocket overnight, but these money moves can help you avoid some pretty big mistakes, like maxing out your credit card and making purchases you can’t afford.

Tony Armstrong is a staff writer at NerdWallet, a personal finance website.

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