AH! Christmas is a little more than four months away.
I know it is only back to school time, but it shouldn’t come as a surprise to anyone that Christmas is coming every year.
Unfortunately, people always seem to be surprised by how quickly Christmas sneaks up on them.
The worst surprise, however, is how much money gets drained from your paychecks or, hopefully, your holiday targeted savings account in the next four months.
Start Saving Now
If you don’t have any cash set aside for the holidays yet, you had better get started saving now.
Depending on your family, you may spend hundreds or thousands of dollars above and beyond normal expenses in the next few months.
If you’re already running your household on a tight budget, you need to start planning now.
The best way to save for an event like this is in advance. You can do this by simply taking a portion of each paycheck and putting it into a separate holiday fund.
Figure out how much you want to, or more likely will end up, spending and then divide that by the number of paychecks until you’ll spend the money.
It’s that simple to figure out how much you need to save.
How To Find The Money To Save
Even if you don’t think it’s possible to find money to save, you’d be surprised where you can cut back. The first step is to see what you can cut out of your normal expenses for a few short months.
It won’t be forever, just until you can save enough money for the holidays. After all, you don’t want to charge up credit card debt or have to skip any other debt payments.
A common area that many people can save money on in the short term is food and dining out. Use up the food that has been sitting in the back of your pantry or freezer. This will give your grocery bill a break for a couple weeks or, if you’re a food hoarder, months.
If you usually frequent fancier sit down restaurants, try less expensive restaurants for a few months.
Better yet, if you want to save even more money cut out half of the meals that you would normally eat out at restaurants. You could even go as far as quit dining out at all if you need to cover a large holiday budget in a short period of time.
Actually Save The Money
So many times we “save” money in one spending category only to spend it somewhere else without thinking. You need to actually save the money if you want the money to be there to purchase Christmas gifts.
One way to do this is setting up a separate holiday fund savings account. Then, set up automatic transfers to your new account each paycheck. This is super easy at the big online only banks like Ally and Capital One 360.
Another way to actually save money requires a little bit more discipline. Rather than save in a savings account, withdraw cash each payday to cover your holiday savings. Then, hide the cash in a safe spot where you know you won’t spend it.
If you have enough discipline your money will still be there when you’re ready to start spending for the holidays.
Start Over Again In January
If it was tough to save enough money for Christmas in just a few short months, then January offers the best opportunity to make things easier on yourself next year.
After you total up how much money you spent on the holidays this year, simply divide that by the number of paychecks you’ll receive before the next holiday season.
Why is it easier to start in January? The amount you have to save per paycheck is much less when you have 12 months of paychecks to spread the cost out over, rather than just a few months.
Do you save up for the holidays throughout the year, or at least a couple of months ahead of time? If not, are you going to start now, or at least start in January for next year?
Kathy says
Every year we decide in January how much we are going to spend for Christmas gifts and divide by 12. Then each month that amount gets saved. I usually start shopping casually in Sept. or sometimes even earlier, but the intense shopping push occurs in Oct./Nov. My biggest problem is shopping for our son and his wife. They live fairly far from us so we don’t see them often enough to know what they need or want. And he is a procrastinator about getting us a wish list.
Christina @ Easy Financial Tips says
I would try to get all of your shopping done BEFORE Thanksgiving, unless of course you know that some items will be significantly cheaper closer to the holidays. This way all you have to worry about when Christmas rolls around is keeping your crazy drunk relatives in line!
Stefanie @ The Broke and Beautiful Life says
I agree. Saving all year long is the easiest policy. I take a percentage of each and every paycheck and put it into a “giving” account for birthdays, weddings, special occasions, and finally- the holidays. I know exactly what my holiday budget is each year by seeing what’s left in the “giving” account. Sometimes I’ll even save some for January so my lil’ bro doesn’t get jipped by having an early January birthday (after my giving account has been depleted).
Christina @ Easy Financial Tips says
I think it’s crucial to devise a plan of exactly what you are getting who. This will help prevent overspending and save you a lot of time at the mall, especially on Christmas Eve. (Use this extra time to look over your shoulder to avoid being trampled…you’re welcome.)
Terry @EasyFinancialTips says
I definitely need to start saving earlier. I’m going to take your advice and limit (if not eliminate) going out to eat for the next couple of months, because that is where most of my money goes to. It’s my biggest weakness!
KK @ Student Debt Survivor says
I always start months in advance. I also like to make gifts so that takes time.
Lance Mlandm says
Making gifts is a great way to show people you care 🙂
Bryce @ Save and Conquer says
Ahhhh! Two months to go before Christmas! My wife’s birthday is in one month! How can I think about Christmas now?! OK, I’m being silly. I wish more people followed your advice to save in advance. Luckily, we have come to an agreement in our extended family that all adults get cards, and that’s it. Of course, I will buy something for my wife, and a calendar with personalized pictures for my mother, but we usually get off with less than $500 total for Christmas.
Lance Mlandm says
That agreement makes Christmas a lot cheaper for everyone. Christmas is really about being with family anyway, not the gifts.
jefferson @SeeDebtRun says
We have been kicking the tires on some ideas for Christmas, but haven’t yet started our shopping.. We really need to at the very least spread out the costs over the next couple of months instead of trying to squeeze it all into a December budget.
Lance Mlandm says
I’m sure you guys will figure it out and I KNOW you won’t go into debt for it 🙂
[email protected] says
I’ve bought a few stocking stuffers but not much more than that. Since we’re moving, I’ve held off on accumulating anything that wasn’t entirely necessary. Plus, I hate Christmas! I’m avoiding it as long as possible!
Lance Mlandm says
That makes perfect sense, but I’m sure you have the money saved for the gifts!
[email protected] says
The tough thing is I want to contribute to my Roth IRA in January, but because of the holidays I often make it in February and March. I put everything on credit and pay if off in January.
Lance Mlandm says
Ah, bummer. Well if you have the money saved in advance for the gifts, then the Roth IRA in January won’t be such a stretch.
SuburbanFinance says
I havent started shopping yet, nor have I started saving. Not because I will be relying on debt for Christmas gifts, but because I use one of the three-paycheck months as my funds for Christmas (just one of the checks).
Lance Mlandm says
That’s a pretty cool idea 🙂 I hadn’t thought of that, because I get paid twice a month.
krantcents says
My wife started last month on a very small scale.
Lance Mlandm says
Good for you guys! I imagine you don’t buy a ton of gifts except maybe for grandkids?
Budget and the Beach says
I agree that if you have a lot to spend, I hope you have already started a big savings pile by now. I think now is the best time to start shopping too. Fortunately I have very little to none Christmas shopping just because of my life circumstances. For that I’m pretty grateful!
Lance Mlandm says
I don’t think we’ll be spending that much on the holidays this year, but I know in the past it would have been nice to save up in advance. The key is knowing what your situation will be in advance in any given year.
Kathy says
We plan at the first of the year how much we plan to spend for the next Christmas. Then divide that by 12 and put that much aside each month. Viola’ Christmas is paid for. I do shop all year and when I see something a recipient would like at a price I like, it gets purchased right then and that amount is recorded for reimbursement from the Christmas account. The only credit card amounts we have to pay after Christmas are the ones that hit the statement after the cut-off date so it didn’t get paid until after Christmas. However, the money is sitting there waiting for that final statement.
Lance Mlandm says
This is awesome and exactly what I wish more people would do! It saves a ton of stress about money around the holidays, doesn’t it?
MMD says
When we make our yearly budget for the first of year, Christmas is worked right into Nov and Dec. Beyond that we also save up all of our credit card rewards all year long until Nov when we can start redeeming them for gifts.
Lance Mlandm says
I need to make a budget or spending plan for a whole year in advance. I recently did some forecasting for the next few months for our student loan debt payoff and it was really helpful!
Catherine says
We’re paid bi weekly and always have a 3 pay month in october/Nov which we use a portion for my annual lisencing fee for work ($650) and Christmas ($600).
We have kiddo almost finished though thanks to a couldn’t pass up sale. We are planning that Christmas budget talk within the next week or so.
Lance Mlandm says
That’s a great way to think about it too! I get paid twice a month though so it doesn’t work for me 🙁
Kostas @ Finance Zone says
Starting early is the key, but once November hits, it’s all down hill from there. I know many people who just suffer from the financial stress of the holidays by spending with every paycheck up until the holiday. I know others who just wait until their last check with bonus and shop then. Usually leaving little time to shop. I agree with starting the savings in January.
Lance Mlandm says
Ugh I could never rely on a bonus to do my Christmas shopping. I’d go insane!
dojo says
Christmas for us is not such a deal, so we won’t have any ‘special’ expenses, other than the regular ones. We do save though, so that we can start the new year better prepared for anything it will bring us.
Lance Mlandm says
Being prepared is a great way to start the new year. Not everyone does Christmas and if you don’t spend any extra money around the holidays more power to you!
Travis @debtchronicles says
Every year I say I’m going to start earlier, and every year November 1st rolls around and we go through the “Crap, we better start thinking about Christmas” routine. Time to scramble again, but one thing I CAN guarantee, it will be ALL cash – no credit card usage for Christmas for this family! 🙂
Lance Mlandm says
Glad I could help remind someone! At least I gave you about a 2 month head start!