Why you should have a Christmas Fund + how to save for it!
I LOVE CHRISTMAS. The whole holiday season just makes me so happy inside. Last year, we put up our Christmas decorations before Thanksgiving and by the time we were taking them down, I was already debating on becoming one of those people that puts up everything on November 1! Ugh, I just love it so much!
While it’s the most wonderful time of the year and filled with good cheer, it can also cost a lot of money. According to the National Retail Federation, holiday sales in 2017 totaled $687.87 billion. That’s right, billion. Experian conducted a survey of 1,000 adults in 2018 to find that the average American planned to spend approximately $846 on gifts. They also found millennial shoppers expected to spend approximately $1,034. That’s a lot of money to try to budget out the month of December if you wait until the last minute.
Do you have and use a Christmas fund each year? Or do you typically start scrambling around November and December to buy gifts, attend parties, and refresh your decorations? Does the holiday season follow you into the New Year with monthly payments?
I used to not do the Christmas Fund thing. There were times I thought it sounded like a great idea, but was never successful in actually doing it. It wasn’t until 2017 when I started making a monthly budget and sticking to it that I finally budgeted out a specific amount of money each month for my Christmas Fund. That year, I would get cash from the bank and had an envelope that I would keep the money in. Then I used the cash for all things Christmas when the time came.
Something I learned: A lot of stuff my family wanted for Christmas would have been easier to buy online, so the following year I made sure to have the cash I saved deposited before Black Friday that way I could easily take advantage of sales and buy online if I wanted and/or needed to.
Another thing I learned after my second year of having a Christmas Fund was that it wasn’t just gifts I needed to save up for. During the holiday season, we typically go see a movie on Thanksgiving, go see movies at Union Station leading up to Christmas, and then we also see a movie on Christmas day. And we may splurge on holiday treats or attend holiday parties. So, I am making sure to add even more to my Christmas Fund this year to account for the holiday movie outings, holiday festivities, and to buy more Christmas decorations now that we have a house.
The whole idea is to be prepared so that you aren’t sweating over your budget that month, not hurting after all the extra purchases, and especially to not go into debt over the holidays! You want to be able to enjoy the holiday season because it really is magical.
Here are tips to help you get started on your Christmas Fund!
Make a list of all the people that you buy Christmas gifts for. Try to think of everyone that could potentially be on this list!
Estimate about how much you are willing to spend on each person and jot it down by their name.
If you want to add some insurance into your Christmas fund, add an extra $20-$40 just in case something pops up such as a Secret Santa exchange at work or a White Elephant with friends.
Now list out any activities that you may do during the holiday season. Examples: Holiday movies, concerts, ice skating, hot cocoa dates, Christmas light shows, holiday parties
Ask yourself if you think you will want to purchase any new decorations. If so, set an amount you would want to set aside for that.
Think about giving. If you plan to give to the Salvation Army or adopt a family in need to buy Christmas presents for, account for that too.
Now add up all the numbers to get your estimated total. Set your Christmas Fund amount. If you come to a number like $840, round up to $850 or if you think you can, round to $900 just for a nice round number with a little cushion!
If you are starting now, here in July, divide that number by 6 months and that is now your monthly budget goal to set aside! If you plan to start it come January, divide that number by 12 and get in the habit of automatically budgeting that amount out every month!
I can’t stress enough how good it feels to have a Christmas Fund in place! It makes buying gifts so much more fun and the whole holiday season sweeter because you aren’t stressing or worrying so much about money!
I encourage you to try to start now as we are six months out from Christmas! You might not be able to make your full Christmas Fund goal that you would like to this year, but try to come as close as you can and plan to have a full 12 months ahead of you in 2020!