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Tap Your Savings to Pay for the Holidays? Here's How to Rebuild It

by Maurie Backman | Feb. 14, 2021

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

A woman looking over her bills with a laptop and notepad at her kitchen table.

Image source: Getty Images

The less savings you have, the more vulnerable you become. Here's how to replenish your cash reserves following the holiday season.

Many people don't earn enough money in their paychecks to cover their regular expenses and also cover all of their holiday-related spending. This especially holds true if you typically travel for the holidays, host big parties or meals, and give generous gifts.

Now for some people, covering those extra expenses boils down to taking on holiday debt. But if you had money in a savings account, you may have managed to avoid debt by raiding your cash reserves.

Taking money from savings for holiday purposes isn't necessarily a bad thing -- unless, of course, you tapped your emergency savings, which is the money you're supposed to have earmarked for unplanned bills or a period of unemployment. If you did, indeed, withdraw from what was supposed to be your emergency fund, it's important that you make an effort to replenish it as soon as possible. Here's how.

1. Get on a tight budget

The less money you spend each month, the sooner you'll be able to put back the sum you withdrew from your savings during the holidays. To that end, it'll help to have a detailed budget that maps out your various expenses. Once you have that information at your disposal, you'll have an easier time identifying bills to cut back on, whether it means being more judicious when grocery shopping or dumping a service you can do without, like your cable plan.

2. Take on a temporary side job

If you already work a full-time schedule, the idea of a second job may not be all that appealing. But if you're willing to hold down a side hustle temporarily, it could be your ticket to quickly replenishing your savings. Think about your talents and interests and see if there's a way to monetize any of them. If you're good with kids, you may want to see about becoming a tutor (whether in person or virtual). There's high demand for that right now, what with so many children having to learn remotely. Or, you can pursue a side job that truly revolves around your own schedule, like web design or selling knit items online.

3. Get cash for holiday gifts you don't want

Chances are, you're sitting on at least a few items from the holidays that don't suit your taste, whether it's the sweater your aunt sent you or the bracelet your friend gifted to you that's too darn flashy. Selling those items could put some additional cash in your pocket, which you can then put back into savings. In fact, while you're at it, take inventory at home and see if there are items outside of your holiday gifts that you no longer have a use for. Maybe you bought a fancy kitchen gadget last year that's still in its box, or you have a gaming system you rarely have time for. The more items you can unload for cash, the sooner your savings balance will be restored to its former glory.

If you took money out of non-emergency savings to pay for holiday gifts, you may not necessarily feel an urge to pay it back. But if you raided your emergency fund, that's a different story. Either way, a few savvy moves on your part could help you rebuild your savings quickly. So be sure to give these a try.

These savings accounts are FDIC insured and can earn you 12x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 12x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2021.

Two top online savings account picks

Rates as of Feb. 15, 2021 Ratings Methodology
Logo for CIT Bank Savings Builder
Logo for American Express® High Yield Savings Account
CIT Bank Savings Builder American Express® High Yield Savings Account
Member, FDIC Member, FDIC
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Open Account

On CIT's Secure Website.

Open Account

On American Express' Secure Website.

Read Review Read Review

APY: Up to 0.40%

APY: 0.50%

Best For: No monthly maintenance fee

Best For: High APY

Min. to earn APY: $25k or $100 monthly deposit for highest tier

Min. to earn APY: $0

About the Author

Maurie Backman
Maurie Backman icon-button-linkedin-2x

Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

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