Start Saving for Christmas Now: A Complete Guide
It’s never too early to start saving for Christmas! If you’re determined to be better prepared financially for the holiday season this year, then you’re on the right track. Saving for the holidays can help ensure that you can enjoy a wonderful Christmas without the dreaded guilt of facing a hefty credit card bill in January. Here are some practical tips to help you save money now for the upcoming Christmas season:
- Set up a dedicated Christmas savings account.
- Calculate how much money you need to save for your holiday expenses.
- Start earning gift cards and cash back for gifts throughout the year.
- Begin cutting back on expenses now to free up extra funds.
- Make saving money an automatic process.
Why Saving for Christmas Should Be a Priority
Christmas is a time for joy, family gatherings, and celebration, yet studies reveal that about 53% of people feel financially stressed during this season. This stress can transform what should be a joyful time into a period filled with anxiety and worry over finances. The last thing you want is to wrap up the holiday season with a mountain of debt and a credit card statement that keeps you up at night. Trust me, I’ve been there! In the past, I didn’t save a dime for Christmas. Life always seemed to get in the way, with unexpected expenses popping up—like car repairs, medical bills, and school supplies. It was only after experiencing a holiday season where we couldn’t afford gifts that I realized the importance of planning ahead.
Christmas doesn’t have to be stressful. By planning in advance and modifying the way you save for Christmas, you can significantly reduce the financial burden associated with the holidays. Below are five tips to start saving for Christmas now so that you can fully enjoy the holiday season without financial strain.
1. Set Up a Dedicated Christmas Savings Account
The moment you decide it’s time to save for Christmas, the first step is to set up a separate savings account specifically for holiday expenses. This dedicated account makes it easier to prioritize your savings and track how much you’ve saved for the holidays. You have a few options when it comes to choosing a savings account:
- High Yield Savings Account: Consider opening a high-yield savings account, which allows you to earn more interest on your savings over the year. Many online banks, like Ally Bank, offer these accounts with no minimum balance requirements and zero fees, making them a great choice.
- Separate Savings Account: Many traditional banks let you create multiple savings accounts linked to your checking account. This makes transferring money seamless and allows you to keep your Christmas funds separate.
- Cash Envelopes: If you prefer to manage your money in cash, consider using cash envelopes. By withdrawing a set amount each month, you can physically see your savings grow and have cash on hand for holiday shopping when December arrives.
Regardless of where you decide to keep your Christmas savings, having a specific place for this money is crucial. You don’t want to accidentally spend it on other expenses!
2. Calculate How Much Money You Need to Save
Having a financial plan in place for the Christmas season is essential. It’s easy to overspend when you don’t have a clear idea of your budget. Start by creating a Christmas Budget. Make a comprehensive list of everyone you plan to buy gifts for, including teachers, friends, and family. Set a budget for each person, and don’t forget to factor in expenses for decorations and holiday activities like photos with Santa.
Once you have this budget, add up the total amount you’ll be spending. This will give you a clear target for how much you need to save leading up to Christmas. To find out how much you need to save each month, take your total savings goal and divide it by the number of months until December. For instance, if your goal is to save $800 in the next 4 months, you’ll need to save $200 each month.
Remember, the sooner you start saving, the less you’ll have to save each month, making it easier on your budget.
3. Start Earning Gift Cards and Cashback for Gifts
One creative way to save for Christmas is to take advantage of cashback offers and gift card promotions throughout the year. A friend of mine saves all her cashback rewards and gift cards for her Christmas shopping, and I think that’s pure genius!
Here are some fantastic apps and websites to help you earn cashback and gift cards:
- Rakuten: This site allows you to earn real cash back when shopping online. Be sure to shop within your budget because Rakuten sends you a check or PayPal cash back four times a year. Plus, when you sign up through my link, you can earn a bonus!
- Fetch Rewards: Simply download this app and scan your receipts to earn points for qualifying purchases. You can redeem those points for gift cards to popular stores like Amazon and Target. Use the code KP5WK to earn bonus points when you scan your first receipt!
- Branded Surveys: If you have some spare time, this survey site lets you earn points redeemable for gift cards or cash. It’s an easy way to earn extra money during your downtime.
- Toluna Influencers: Another survey site that rewards you for sharing your opinions. Regular participation can help you accumulate gift cards or cash for your holiday shopping.
4. Cut Back on Expenses Now
One of the easiest ways to save for Christmas is to start cutting back on unnecessary expenses now. Take that extra money and funnel it directly into your Christmas savings account. To identify areas where you can save:
- Print out your last three months of bank statements.
- Calculate how much you’re spending each month across various budget categories.
- Ask yourself three questions about your recurring expenses: Can I cancel this service? Can I negotiate a better rate? Is there a cheaper alternative?
By closely examining your spending habits, you’re likely to find areas where you can save money. Whether it’s cutting an unused subscription or reducing dining out, every little bit adds up!
5. Make Saving Money Automatic
The easiest way to save for Christmas is to make the process automatic. Set up automatic transfers to your dedicated Christmas savings account right after payday. This way, you won’t have to think about it, and the money will be saved before you even have a chance to spend it.
Including Christmas savings in your monthly budget will help you stay on track and ensure that you reach your savings goals with minimal effort.
Common Mistakes to Avoid When Saving for Christmas
As you embark on your Christmas savings journey, here are three common mistakes to avoid:
Don’t Steal Money from Your Christmas Savings
It might be tempting to dip into your Christmas savings account for unexpected expenses. While it’s your money, it’s best to resist this temptation unless absolutely necessary. If you find yourself struggling financially, consider creating an emergency budget to help you cut down on other expenses.
Don’t Go Shopping Without a Plan in Place
Once you’ve saved money for Christmas, it’s essential to stick to your budget while shopping. Before you hit the stores, create a plan. Know what gifts you need to buy and how much you can spend on each one. Cross each person off your list as you purchase gifts to avoid overspending.
Don’t Forget to Save for Decorations and Experiences
It’s easy to focus solely on gifts, but don’t overlook the cost of decorations and holiday experiences. Items like Christmas trees, lights, and holiday outings can add up quickly. Make sure to include these expenses in your savings goals for a truly joyful and stress-free holiday season.
The Bottom Line
No matter how you choose to save for Christmas, just be sure to start now. Implementing these practical tips can make your holiday season less stressful and more enjoyable. With a little planning and foresight, you can embrace the joy of Christmas without the financial stress that often accompanies the season.