Of all of my financial goals in the year, giving my children a magical Christmas is pretty much at the top of my priority list. I set aside money for Christmas right away when the new year comes and don’t touch it until October. Going into debt for Christmas is stressful. Wondering how you will pay for Christmas is stressful. Somehow as a Work At Home Mom, being home amplifies that stress for me if we don’t have our ducks in a row saving for Christmas. So today I’m sharing my Christmas savings plan. I hope it can make your next Christmas a little less stressful.
Step 1: The hardest part
First, I look through my credit card and bank statements to determine what we spent on Christmas this year. I think outside of the box to make sure I include hostess gifts we brought to holiday parties, travel expenses, charitable giving, meals that we made, and meals that we ate out (in addition to the obvious line item: gifts).
My number won’t be the same as your number and there is no right or wrong amount to spend on Christmas, but it is really important to know how much you spent to have a place to start. Grab a copy of our FREE GRAPHIC ORGANIZER to help you record your spending and make a plan.
Step 2: The magic of October 1st
I make sure our Christmas money is set aside by October first and I cannot express how much this lowers my stress. Some people put their Christmas money in a separate savings account at their bank. A digital envelope system works best for me within my budgeting software. If I spent $2000 on Christmas last year, then I’m going to make sure I have $2,000 in my Christmas fun before October 1st. Here are two ways to reach that goal:
- Plan A: Pay Yourself First – If I need to save $2,000 in 10 months then on the first of every month I will automatically transfer $200 from my checking account to my savings account. It will leave my account before I have a chance to spend it and we will live on what is left.
- Plan B: Speed Challenge – If you have a competitive nature or are looking for a way to involve other members of your household, racing that pace can be an exciting challenge. Print your FREE GRAPHIC ORGANIZER and fill in those same monthly savings targets on the right-hand side. (insert image) Post the graphic organizer where it can be seen daily and work together to save the full amount as quickly as possible, racing the pace shown by the lines and getting to the end before October 1st. Every time you stay in for free family time instead of eating out or going to the movies, transfer the money that you saved into your Christmas fund. Mark your graphic organizer and celebrate your progress towards the goal.
Step 3: Free money first
I love using Amazon wish lists to keep life organized all year long. In October my husband and I start to organize our wish lists and we start to add ideas for our children to theirs. I remind my siblings to update theirs and start looking at what free money I have to spend. I look at my credit card rewards balance and sites such as MyPoints where I may have enough points to turn in for some gift cards. These gift cards may become gifts or they may be the beginning of my Christmas shopping. In October I take inventory of any gift certificates that I may have laying around and vow to spend those first before spending any money from my Christmas fund.
Step 4: Finish shopping
Once I have used all of the points and gift cards, I start shopping from my Christmas fund. I know we have enough because I did that first, uncomfortable step. We can clearly see how much our spending target is and know it is possible to stay within that number, since that number represents what we spent the previous year. I can enjoy the season of giving and actually look forward to making budget-friendly choices to make it easier to refill the digital envelope the following year.
I would love to hear in the comments section below how you currently save for the holiday season. If you decide to try the FREE GRAPHIC ORGANIZER I would love to hear how you like it. Tag @cookfamilyresources on Instagram so we can celebrate your progress towards a stress-free Christmas season.
