There are 124 days until Christmas! That sure doesn’t sound like a bunch to me when I consider all the things that I need to spend money on before then. So, I think it is time to learn how to save money for the holidays!
Do you get a fist of anxiety and fear in your stomach when you start thinking about holiday spending? The majority of families go into debt each holiday. It adds unnecessary and unwanted stress to what should be a joyous season. It’s certainly no way to spend the holidays. So what’s the solution? Actually, if you start saving for the holidays right now you can enjoy a financially stress-free season. Here’s how:
#1 Become the Ghost of Christmas Past
Take a look at the past few years. How much did you spend? You’ll need to pull out old bank statements, credit card receipts and check book registers. Total the spending for the season. In addition to adding up the amount you spent on gifts, take a look at travel and dining expenses too. The average family spends around $700 on holiday gifts. That doesn’t include travel and dining.
#2 Take a Look at Your Future
Start making a list of the expenses you expect to have this holiday season. Make a list of all of the people you want to buy for and a list of the people you may have to buy for. Don’t forget teachers, coaches, and service providers. Also if you plan on traveling, start taking a look at flight and car rental costs right now.
#3 Bump It Up
Once you total your anticipated expenses, round up. There are always some unexpected expenses that come up during the season. For example, your child may have a few holiday parties to attend which need gifts, or you may need to buy a new outfit for a work party.
#4 Do the Math
Now that you have your grand total, the next step is to divide the number of weeks you have between now and December 1st. For example, let’s say you spend the national average of $700 and you have 12 weeks until December 1st. That comes out to about $60 a week.
#5 Automatic Deductions
If your bank offers it, start an automatic withdrawal plan from your checking account into your savings account. Withdraw the weekly figure you came up with. In the example it was $60/week. Setting up automatic deductions makes it much easier to save. The money is withdrawn from your account regularly and you don’t have to worry about it. You know that once December rolls around you’ll have the money to spend and you won’t go into debt.
What if the weekly deduction is more than you can afford?
You have a few options here. You can take on a little extra work to make up the difference. You can cut back on your holiday budget. You can also take a look at your household budget to see where you can make some temporary cuts. For example, you might decide to go without cable television for a few months. Or you might cut back on your weekly grocery bill and eat a lot of noodles for a few months.
You’re in control now and you have the knowledge to make the best financial decisions for you and your family this holiday season.