Determine how much you need to save
There are two ways you can determine how much you need to save for Christmas. One, is by using my general rule to save 1 percent of your yearly take home pay. For example, if you make 50,000 dollars a year that means you need to save up 500 dollars for the holidays. You may find this number to be a bit high or a bit two low for you though so in that case use the second strategy.
Go through and look at what you spent on Christmas last year. This includes things like food, decorations, travel, gifts, etc. If you don’t have these records with you anymore you can just make an estimate on how much it cost. This is the base number you need to save up for this Christmas.
Remember to be realistic with this goal. If you know you are going to spend 1,000 dollars for Christmas don’t plan on spending 400 this year. It’s important to be realistic with your goals and save the amount that you will need. If you don’t this is where overspending can happen. Plan for what you need.
Brainstorm all the different things you will need to spend for Christmas
Write down all the different categories you need to spend for Christmas such as travel, gifts, wrapping paper, decorations, food etc. Then, go through and divide out your budget given above and decide how much you will spend in each of these categories.
For example, how much will you realistically spend on travel this Christmas? Do you need to save up for a plane ticket or do you need to save up for a 2 hour drive? It’s important to place your money where you need it most.
Start saving- Take a bit of money out of each pay check
Take the number you’ve decided on for Christmas expenses and divide that by the number of months you have left till Christmas. This number is the number you need to save up each month to meet your Christmas financial goal. If you get paid every other week, determine how many pay periods you will have till Christmas and divide by that number.
Take this number out of your pay check every time you get paid. Create a new bank account at your bank and set up an auto withdraw with the amount determined above to go into this bank every pay period.
You will find by budgeting this way makes Christmas an affordable time of year. There is no need to charge everything to credit cards if you plan in advance for your Christmas expenses and then stay to that budget.
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