Can you believe we have only six months until Christmas? 

That can feel like plenty of time, especially when we haven’t even started back-to-school shopping yet. But with stores starting holiday sales earlier and earlier, I want to be prepared. And with tariff uncertainty already raising prices, I want to be prepared so I don’t overspend sau turn to credit cards during the holiday season. 

So yes, I’m saving for “the most wonderful time of the year” now, and you should, too. Here’s my holiday savings plan and where I’m stashing the money until I need it. 

How I’m saving for the holidays now 

Starting this week, I have an automatic transfer set to move $50 from my checking account to my high-yield savings account every time I get paid. Since I’m paid twice a month, that will add up to $550 by Dec. 1. 

By starting now, I’ll also have a good amount saved if any deals or sales pop up sooner, like on Black Friday. If I buy a gift before I hit my $550 goal, I’ll deduct it from my budget to avoid overspending. 

If you also want to plan ahead, figure out how much you can comfortably afford to move into a savings account each pay period. Even if you can afford only $25 a month, you’ll still have $150 saved before the end of December. 

How a high-yield savings account makes it easy

I’m keeping my holiday fund in my high-yield savings account. I use Ally Bank, which offers a 3.60% annual percentage yield, but any bank offering you over 3.5% APY will do. I won’t earn much in six months by only depositing a couple of hundred dollars, but it’s better than what I’d earn by letting it sit in a checking account or traditional savings account earning 0.02% APY at best. 

Ally’s high-yield savings account also comes with two unique features that I love. First, it offers goal-tracking so I can see how close I am to reaching my holiday fund goal. And Ally’s savings buckets help me keep my holiday fund separate from my emergency fund without opening a separate account. 

Interest and savings features aside, keeping this money in an account separate from my checking and everyday spending prevents me from accidentally dipping into it. If you struggle with impulse buying, keeping money that’s earmarked for other goals separate can help eliminate this temptation.

If you don’t already have a high-yield savings account, check out CNET’s recommendations. Look for an account with a competitive APY, no monthly fees and easy access so you can quickly transfer your funds.