Don’t you want to scream when you see Christmas displays in stores before Halloween? Or what if “It’s beginning to look a lot like Christmas” has been floating around in your head for two months because it starts playing at the beginning of November?
The Christmas creep can be annoying, but there’s at least one good reason to think about the holidays before the leaves turn: you’ll have more time to save.
With all the decorations, food, parties and gifts, celebrating Christmas is synonymous with spending money. The National Retail Federation found that consumers spent a total of $ 798.4 billion over the 2020 holiday season, up 8.3% from the previous year.
If you wait until November or December to prepare for these expenses, you’ll often have to bill your purchases and pay them off – plus interest – well into the new year. Instead, set up a Christmas savings plan to avoid debt and over-spending.
Create your Christmas savings plan
To save enough money to cover all of your vacation expenses, figure out how much you want to spend and divide it by the number of weeks you have to go shopping. That tells you how much money you need to save each week to build your Christmas fund. In personal finance, we call this setting up a sinking fund.
To estimate your total savings goal, first make a list of who you are shopping for and how much you will be spending on each person. It can be helpful to refer to last year’s expenses. Or you can research and add up the prices of the items you want to buy for each person.
Warning: your Christmas savings plan needs to cover more than just gifts. So add estimated costs for decorations, food, and holiday events to your shopping list. Between special occasions where you donate a bottle of wine, gifts for your children’s friends or a secret Santa Claus at the office, and the bountiful meal on the actual holidays, these “extras” can really add up.
Add it all up and divide by the number of weeks left before you get to the stores. Unless you’re a fan of last minute shopping, it means you have some leeway before December 25th.
To make things easier, we’ve set out how much you need to save each week over a 12-week period to make between $ 200 and $ 1,000 extra cash for the holiday season.
If your Christmas budget is $ 450, you’ll need to save $ 38 per week for 12 weeks. If you want to save $ 800 to meet your Christmas savings goals, you need to set aside $ 67 per week for 12 weeks.
Another vacation saving tactic is determining how much money you can save and building your vacation budget based on that. For example, if you can save just $ 25 a week on your Christmas savings, you will save $ 300 in 12 weeks. That would be your limit for all of your vacation expenses.
If you think you will need more money to pay for all of your Christmas expenses and still get out of it debt free, then you need to start saving earlier so you have more weeks to save. In fact, you can implement your Christmas savings plan anytime, all year round.
When you’re starting to save up for Christmas, it’s good to keep your vacation savings separate from the rest of your money so you don’t accidentally spend your supply on everyday expenses. If you use an under-savings account with your bank or credit union, set up automatic savings transfers every week to make sure you stay consistent.
If you choose the cash envelope route, make sure you have an envelope that is intended solely for vacation expenses and not for other short-term goals. Set weekly calendar reminders to get you to put the money aside.
Tips for saving money for the holiday season
Removing the fat from your weekly expenses is a great way to find extra cash on Christmas gifts. Take out your budget and mark any unnecessary recurring expenses. Identify a few – like fast food restaurants or trips to the nail salon – that you can give up until you’ve finished your Christmas shopping.
If you want to grow your savings quickly, try a no-spend challenge. Or cut your grocery budget by taking the pantry challenge and planning meals with what’s already at home.
Saving for the holiday season isn’t just about making cuts. You can temporarily increase your income by doing a part-time vacation appearance (bonus when you get a company discount) or doing odd jobs on Fiverr or TaskRabbit. Make way for the new gifts you get by clearing out your closets and selling things online.
How to spend less on gifts during the Christmas shopping season
In addition to a Christmas savings plan, you also need to set a Christmas budget that is financially comfortable for you.
Here are six ways to spend less this holiday season:
1. Make your own gifts.
Do your research and make Christmas presents for your friends and family. Try one of these 12 DIY Christmas gift ideas.
2. Buy early and take advantage of the sales.
Instead of waiting for you to hit your Christmas savings goal, you can use the money you save to buy gifts early when you have something on sale. Bonus if you have saved coupons.
3. Use old gift cards.
It’s easy to forget about gift cards that you received a long time ago and that have some remaining balance. Dig up your cards and check the balance. Buying gifts with your gift cards frees up cash that you can use for something else.
4. Redeem your credit card rewards.
When you get cash or points for swiping your credit card, save them to use on your vacation expenses. Simply use your credit card responsibly so that you can celebrate a debt-free Christmas.
5. Implement the four-gift rule.
Save money by limiting the number of gifts you give your children. The four-gift rule focuses on giving each child only four things: something they want, something they need, something to wear, and something to read.
6. Online comparison shop.
Do your vacation shopping online and compare prices to get the best deal. Some browser extensions even do the memory work for you. Pay attention to the shipping costs when shopping online. These shops offer free shipping with no minimum order quantity.
Nicole Dow is a senior writer at The Penny Hoarder.