We just finished with Christmas, it seems, and now I’m writing about it already. Maybe you’re one of millions of people who are still paying off the damage done by Christmas past and would just as soon not think about Christmas future. The good news is that thinking about Christmas NOW just may get you out of the credit card jungle this time next year. Saving for Christmas throughout the year isn’t a novel idea, but it’s one I just decided to follow through on last year. I started later than I should have, but still managed to save $350 towards my Christmas budget.
What I suggest is this: start small. Maybe $5 or $10 per week (I’m doing $10). I set it up through my bank and every week $10 is automatically deducted from my checking account and put into a savings sub-account that I set up just for Christmas money. Once I started doing it, I hardly noticed the $10 being gone. The beauty of it is, if you can keep it going year-round, you can easily end up with a little more than $500 cash at Christmas that you don’t have to put on your credit card. If you’re more ambitious than I am and want to do $15/week, you’ll have $780 after one year.
Another option is to add to the fund with windfall money during the year — if you get a rebate for something, put it into the account. If your mother surprises you with a random $20, put it in the account. If you find a quarter in the parking lot, add it to a change jar and deposit the coins into the account.
The money we saved for Christmas this year didn’t cover all of our expenses, but it was a great feeling to have more than $300 in cash that seemed to magically appear. (Yes, I know it wasn’t magic, but I did find that I forgot about the account for much of the year so it did feel a little magical to remember it in December).
I’d encourage you to give it try now that time is on your side. There are many months left between now and Christmas. Do any of you have other ways you pay for gifts at the holidays? If so, please share them in the comments.
{ 3 comments… read them below or add one }
I shop throughout the year. I have gotten some amazing bargains already!
The automatic deduction is the key. I use a similar strategy to save up for my car insurance every 6 months. Since it isn’t monthly I tend to forget about it. But with $20 of each paycheck moving to a dedicated account, I can allow myself to forget. Good tip!
@Dana — excellent idea. Every year I try to do that, but it’s late summer before I remember to start shopping.
@the weakonomist — good suggestion to use automatic withdrawals and dedicated accounts for insurance. It’s so easy to set up sub-accounts online, it would make sense to do this for any bill that’s due only once or twice a year.