The Holiday Season is fast approaching and with it comes all the gift giving, the parties, travel hither and yon, decorating the inside and out of your house, and other assorted hoopla just waiting to derail your finances.
As tempting as may be to whip out the credit cards and tell yourself you’ll sort it out in January, you’re not going to do that.
We’re going to create a plan for setting aside some money each week from now until the beginning of November (or longer if you wish) so you’re spending cash and not using credit this Christmas to avoid the holiday debt hangover.
Everyone’s financial situation is different, so you’ll need to decide what a reasonable amount of money for holiday spending would be for your family. Think back to last year, do you remember what you spent? Does that number need adjustment?
It may help to have a number to compare –
According to The American Research Group the “average” family spent $882 on Christmas in 2015.
Personal finance guru Dave Ramsey also references “about $800” as a reasonable amount for a family of average income ($50,000 per year) to budget in total for Christmas.
Of course there are a lot of variables in there. Like, does that average family have 2 kids, no kids or 10 kids? Is that average family already in debt up to their eyeballs and should make some really severe cutbacks until they learn to limit their spending?
So, you’ll need to decide what seems realistic and reasonable to you. I would never presume to tell you how much to spend.
For me the bottom line is: It doesn’t matter what you spend your money on, what matters is that you build it into your budget and are accountable to be sure the amount you spend in your family’s best interest, long term. Like, in January and beyond.
Have an amount in mind?
Now, take that number divide it by eight and that’s how much you need to save consistently each week, starting now, so you can reach your goal by the beginning of November.
If saving that amount in eight weeks seems unrealistic, you may need to rethink the plan and lower your budget. If it would take you more than eight weeks to save up, you may be overspending or you’ll need to begin earlier next year.
Now – get that money into a savings account to be used strictly for holiday spending.
Make saving a game
Set up a savings account specifically for holiday spending. Give your account a fun name, like Cold Cash Christmas or Savings for Santa. Place visual reminders for yourself to sock away cash, like a Christmas card on the mantle or a festive bow in your purse. Change your lock screen on your phone and screen saver on your computer to festive winter scenes.
Steal from yourself. Every few days look at your checking account balance and move the odd numbers into savings. For example – if you’ve got $1564.73 transfer the $4.73 into savings.
Reward yourself. When you do something thrifty, “pay” yourself by adding money to your savings. If you donate a few boxes to charity, put $10 in your special account. Skip the restaurant and put the savings in the account.
Really save those savings! You know on your grocery receipt where it says “You saved $6.50 today”? Actually transfer that dollar amount to your savings account.
Earn some additional money
- Is there time in your schedule to pick up a little freelance work?
- Take on a part time job?
- Can you babysit, cook or clean for people?
- Can you tutor a student? Do you craft pieces you could sell?
- Do you have items laying around your house that could be sold?
Any money you earn goes straight into savings.
Plan to spend less
Talk with family and friends about cutting back on gift giving. Some families have a “gifts for children only” policy and the adults happily fend for themselves.
If your plans include travel, consider getting together after the holidays when prices on airfare and hotels are lower.
Begin your shopping early so you’ll have more time to compare prices and watch for sales. You can also get creative with where you purchase your gifts by checking out thrift stores or shopping online at eBay or Etsy. See: 9 Tips To Go Thrift Shopping Like a Pro
If you plan to save money by making and giving handmade gifts – Word to the wise – don’t just buy all the stuff and never make the gifts. Seriously. Do you know how many craft rooms are filled with half-finished gifts?
I know how it goes. You search Pinterest for the perfect amazing personalized gift, you spend the money on supplies, put off making the gifts, feel totally guilty, go shopping in a panic December 22 to buy last minute gifts for all the recipients you’d planned to WOW with your thoughtful creativity.
If you’re going that route – please – make a schedule for completing the crafts and stick to it.
My wish for you is to get a head start on planning so you’ll enjoy a less stressed, more blessed end of the year with no financial hangover in 2017.