Start saving now for Christmas 2022

It’s never too early to start saving for Christmas spending. The sooner you include this in your monthly budget, the easier it will be to manage those upcoming expenses and start the following year off without any additional debt. This will allow you to enjoy Christmas as it is meant to be — a time to focus on family and friends, not a time of worry or financial stress. Planning in advance is key, here are some ideas to get you started:

1. Set up a separate savings account specifically for Christmas. You have options but I would suggest a high-interest savings account with zero fees. Another option is to pull cash out monthly and keep it in an envelope. The important thing is to keep it separate from your other funds knowing it is designated for one purpose. Making saving automatic is the easiest way so you do not need to think about it. If you do set up a separate savings account, have an automatic withdrawal from you operating account to the savings account. Set it up to happen with your pay days so you know it will always be there.

Some employers offer a savings plan, they will withhold your funds and deposit directly to a savings account for you, this way you won’t even see the money to miss it.

You can also incorporate fun challenges for saving. For example, challenge yourself each day to save one more dollar. Day one you save $1, every day of the month you increase that by another $1. On day 30 you set aside $30. If you do that for a full month, that will total $465 and in six months you will have saved $2790! If you don’t feel that is manageable, break it down into 15 days at a time. Day one is $1 then day 15 becomes $15 and you start all over and continue in 15 day increments. At the end of six months, you will have saved $1440.

2. Determine how much you will need to save. This will keep you on task and ensure you don’t overspend. Typically, if you are last-minute shopping without a plan or budget, you will end up overspending. List each person you will be buying for and set your budget for each. It doesn’t hurt to budget for an additional person or two in case you missed any. Better to be prepared. Don’t forget to also save for decorations, stocking stuffers, gift wrap supplies, donations and entertaining if that’s part of your Christmas celebrations.

Next take that total amount and divide it by the number of months left until Christmas, that is what you will need to set aside each month. If that number is not reasonable, you will need to look at your list to see where reductions can be made. Maybe you can consider other options for gifts such as making something, baking, or simply giving of your time; get creative!

3. Consider using points accumulated on credit cards, if available or cash back cards. Don’t spend any points earned during this time and put these towards your Christmas budget.

4. Cut back on expenses. Develop a household budget if you don’t have one already. To do that you will need to see what your current spending habits are. Tracking expenses for three months and then seeing where you can cut back is ideal. As we are getting closer to Christmas, you likely won’t have the time for this, but you can look back at your past three months of bank statements to determine how much you are spending on each of the areas of your budget: housing, living, personal, transportation, insurance, and other payments. You can decide where reductions can be made to free up some cash for the Christmas savings plan.
   
   Maybe you can consider lowering regular household bills like cable or internet or put a hold on take out or purchasing clothes for a period of time. It may feel tight at first, but you will adjust to the cutbacks and be thankful you did when you have your money ready and waiting for the Christmas season.

Other ideas for cutting back on expenses include:

• instead of buying coffee on your way to work, make it at home
• meal plan for the week and only shop only for what you need
• pack lunches instead of buying them
• carpool, bike, or walk to save on fuel

5. Earn some extra cash. This may not be an option for everyone, but some simple ideas are things like dog walking, house cleaning, yard work, or shoveling snow. There are many people willing to pay for those services.

6. Start shopping early. If you have your plan made up early you can watch for items to go on sale in advance of the Christmas season.

Developing a budget and having a plan for Christmas shopping will reduce the financial stress and burden that can be associated with Christmas allowing you to enjoy the holiday season. Remember, don’t go shopping without your list and don’t steal from your savings account.

MNP can help

Some people endure excessive financial stress not only during the Christmas season, but year round. If concerns about your debt or financial future weigh on you, don’t hesitate to reach out for help. A no-cost initial consultation with MNP can help you find the best path forward.