Wondering how to make Christmas feel like less of a financial burden? The best thing you can do is start saving for Christmas now! Gifts and other activities really add up, but the holidays can feel much more manageable if you have your Christmas fund fully funded before it’s time to shop.
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On the one hand, it’s the most wonderful time of the year. People are generally more cheerful, we get to spend quality time with the ones we love most, and we tend to reflect on all the blessings we’ve been given.
And let’s be honest; the presents are a nice perk too! 🙂
But on the other hand, Christmas can be a source of financial stress. The pressure to buy gifts just so our families can have a “nice Christmas” is enough for some people to dig themselves deeper into credit card debt.
I don’t know about you, but I can’t fully enjoy the holiday season when I’m worried about money.
Seriously, who wants to have a nagging credit card bill hanging over their head during the most wonderful time of the year? Not this girl.
Christmas is by far my favorite holiday, and I don’t want anything getting in the way of my Christmas joy.
That’s why I’m a huge fan of having my Christmas fund fully funded by the time I start shopping. The money is already sitting there in my bank account, earmarked for this very occasion, and I can spend it guilt-free because I know my shopping won’t cause us any financial problems.
It’s a wonderful feeling, for sure!
If you’d like to enjoy the holidays without worrying about money too, then you’re in the right place. I’m going to show you how to start saving for Christmas now so you can have your Christmas fund fully funded by the time you’re ready to start shopping.
Let’s get started!
Why You Need a Christmas Fund
For many people, Christmas is a real struggle. And I totally get it. Christmas is expensive, especially if you have a large family.
We buy gifts for 19 different family members plus a few friends, so I know how expensive Christmas can be. And that doesn’t even include costs for a live tree, decorations, food, and charitable giving!
Without a plan, it’s easy to just put your Christmas spending on a credit card and call it a day. Many people are still paying off their Christmas costs well into the new year, but that’s no way to enjoy the holidays. Christmas spending shouldn’t put you in a financial bind.
It’s probably obvious, but the biggest benefit of having a Christmas fund is that it prevents you from taking on debt to pay for holiday expenses.
It also allows you the freedom to give generously without feeling guilty or even resentful.
Lastly, having a Christmas fund keeps your spending on track. When you know you have a certain amount allotted for holiday expenditures, you’re less likely to go overboard.
Related: How to Create Your Christmas Budget
Now that you know why having a Christmas fund is a good idea, let me share with you how Josh and I approach our holiday saving.
How We Handle Our Christmas Fund
We save for Christmas all year long. Even though I try to keep my actual spending below $800, I like having $1,000 in my Christmas fund just in case I need to buy an unexpected gift or we want to participate in an unexpected activity. It’s nice having a little buffer just in case.
Since we save all year long, I transfer $85 into our savings account each month. That gives us a little more than $1,000 by the time we’re ready to shop.
This works for us because it spreads the big cost of Christmas over a longer time frame. The monthly “payments” into our savings account are smaller and feel like less of a burden than if we had to come up with $1,000 in November or December.
As genius as it is to save for Christmas all year long, I can’t take credit for coming up with the idea. Actually, my parents have been doing the same thing for years, and that’s how I learned this little trick.
In fact, my mom was the one who pointed out that Christmas comes at the same time every year, and yet most people are completely unprepared when it’s time to shop. It’s like Christmas sneaks up on them even though it falls on December 25th year after year.
After she pointed out that simple yet profound truth, I started saving for Christmas year ’round, even when I was still a teenager. And I’ll tell ya, that awakening has served me well over the years by keeping me out of credit card debt!
Saving for Christmas all year long works well for us, so let me show you how you can start saving early too.
How to Start Saving for Christmas Now
Saving for Christmas really isn’t that complicated. In fact, all it takes is a few steps to start building your Christmas fund right now.
Determine where you’ll keep your Christmas fund
First things first: decide where you’ll keep your Christmas fund. Ideally, this would be a bank account.
Some people probably keep their Christmas cash in a secret place at home, but I think that’s risky. Your house or apartment could burn down or you could be robbed and lose all of that money. If you want to keep your money safe, I definitely recommend a bank account.
Of course, you have a couple options when it comes to keeping your Christmas fund in an account.
- Some financial institutions have a special Christmas savings account that you can open and contribute to. Often, you are only allowed to withdraw the cash near Christmas, so that prevents you from dipping into your fund for non-Christmas-related expenses. This can be a good option if you have a hard time staying disciplined with your money.
- You can open a separate savings account specifically for your Christmas fund. This is another way to keep your Christmas money separate from your regular spending money or emergency fund. As with the previous option, this one can be good if you think you’ll be tempted to spend your Christmas fund before Christmas actually arrives.
- You can deposit your Christmas money into the same savings account that you use for other saving purposes. However, the only way to keep your Christmas money separate from the other money in the account is by logging it on paper. This is not a good option if you’re easily tempted to spend money.
Of these options, I personally use the last one. Of course, it does require discipline 1) to keep track of how much money is in our Christmas fund and 2) to not spend that money when I see a large total balance in the account. However, since I’m disciplined with our finances, I actually prefer this method of saving.
For your Christmas fund, pick the option that will work best for you. You know your strengths and weaknesses, so pick the option that will best hold you accountable.
Decide on your Christmas fund amount
Now that you know where you’ll put your Christmas fund, you need to decide how much you want to have in your Christmas fund.
How much do you normally spend on Christmas, and is that how much you want to spend this year? Determine the specific dollar amount you’re comfortable spending this year.
As I mentioned earlier, we typically spend around $800 on Christmas, but I like to have $1,000 saved up just in case.
Make “payments” to yourself
Once you know how much you want to have in your Christmas fund, you need to figure out how much to contribute each month.
To determine the monthly “payments” that you’ll deposit into your Christmas fund, simply divide your total fund amount by the number of months from now until December.
For example, since we save all year long, we transfer $85 to our Christmas fund each month. $1,000 / 12 = $83.33 but I round up to $85 for simplicity’s sake.
However, perhaps you’re reading this blog post in July. In that case, $1,000 / 5 = $200 per month that you’d need to deposit in your Christmas fund to have $1,000 by December.
You can make the deposits manually or you can set up an automatic transfer with your financial institution to handle your deposits automatically. If you’re not a disciplined saver, the automatic transfer will probably work best for you.
Other ways to save money for Christmas
At this point, you might be thinking “great!” and that you can reasonably save up your entire Christmas fund without any trouble.
On the other hand, you may be incredibly disappointed and frustrated. Maybe there’s no way you can save up X amount of dollars between now and December, and it looks like your Christmas spending is going on the credit card again.
It doesn’t have to be like that.
You might have to do a little creative thinking, but I’ll bet there’s a way around those credit cards. Here are some ideas to get you started.
Lower your total Christmas fund
Maybe you can’t save up your ideal Christmas fund in time. But can you lower your total number to a more reasonable amount? Set your fund a hundred (or more!) dollars lower so you can fund it without stressing.
If you make a goal of spending a little bit less on gifts this year, you may be able to get away with a smaller Christmas fund.
Reduce your spending in other areas
Take a good look at your current spending habits. Can you save money in other areas and put it toward your Christmas fund? Eating out at restaurants is a notorious money drain, so perhaps you could eat at home and put the money you would have spent eating out in your Christmas fund.
But don’t stop at restaurants. Do you spend a lot of money each month on brand new clothes? Do you drink Starbucks every morning on your way to work? Are you paying for subscriptions you don’t even use?
If it means having a debt-free Christmas, then by all means get frugal with your spending!
If you’re good at crafting or making things, why not make your Christmas gifts this year? Homemade Christmas gifts have a certain personal touch that you just can’t find in stores. They don’t have to be expensive, and the receiver will feel special knowing you took the time to make a gift especially for him or her.
Pick up a seasonal job
Maybe all you need is a few hundred dollars to round out your Christmas fund. Lots of retail stores hire seasonal help around the holidays, so you may be able to work a few hours per week between now and Christmas to meet your goal.
If you don’t have the time or desire to work a part-time job, try selling things around your house. You may not make a ton of money, but it will help you towards your goal. Amazon, eBay, and Craigslist are excellent places to sell books, DVDs, and household items.
Wrapping It Up
You deserve to fully enjoy the holidays with your loved ones, so don’t let your Christmas spending cause you unnecessary stress. Start saving for Christmas now so you can give without feeling guilty and make memories without thinking about your credit card bill.
All it takes is a little planning and discipline to make it happen. Trust me; Christmas doesn’t feel like such a big financial burden when you start saving early!
P.S. If you need some help planning out your holiday season, be sure to grab a copy of my free printable holiday planner!
Other Posts You May Enjoy
- Holiday Planner 2018: Free Printables to Simplify the Holidays
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- Holiday Cleaning: How to Get Your Home Ready for the Holidays
- Christmas Gift Ideas to Fit Your Budget
- Christmas Gifts on a Budget: How to Save Money on Christmas Gifts
- Read This Before You Buy a Flocked Christmas Tree
- 7 Things You Can Do Now to Prepare for the Holiday Season
- 15 Healthy Holiday Tips: How to Stay Happy and Healthy During the Holidays
What about you? Have you started saving for Christmas yet?
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