Summer is practically over and everyone is gearing up for football tailgating and pumpkin spiced-lattes right? If you’re financially savvy, you’re likely also thinking about the upcoming holiday season and how much money it might cost.
Most people don’t start thinking about the holidays and planning out their spending until Thanksgiving or Black Friday. By this time, it’s almost too late to come up with a solid budget and enough extra money for Christmas gifts.
Americans spend about $1,000 on Christmas in general from buying gifts and decorations to attending events and making donations. That’s a lot of extra money to come up with if you’re not prepared. This leads some people to resort to credit cards.
Here are 3 reasons why you might want to start thinking about saving for the holidays now aside from your fall fun.
1. Preparing Your Finances Often Means Less Stress
Saving up for any big expense in advance can make it a less stressful experience to spend the money. Hint, this is because you’ll actually have the money when it’s time to spend it.
The holiday season is supposed to be a time to relax, reflect, and enjoy being with family. If you spend all your time stressing about how you’re going to have the money to pay for your expenses or working overtime it’s not going to be a good experience.
Financial stress can also link to medical and mental health issues like general illnesses and depression. Why risk getting overwhelmed and stressed out when you can just start saving money early?
2. You Don’t Need A Lot of Money to Get Started
Sure, it may seem daunting to come up with the $600 or whatever you need to spend during the holiday season. If you start saving early, you don’t have to worry about that large amount and can just save as you go.
It’s so much easier to start setting aside $20 every paycheck then come up with hundreds of dollars in 2 weeks time.
3. You Can Avoid Debt
One of the best reasons to start saving for the holidays in advance is to avoid getting into debt. I’ve had holiday debt before and it’s not fun.
When you overspend during the holidays, it often carries over into the next year. While everyone else is setting new goals and resolutions, you have to worry about the Christmas debt you have to pay off.
This can slow you down when trying to reach your other goals as well. If you only pay the minimum on your debt, it could take you years to pay it off. Yes, a whole new Christmas season could come and go and you’d still be paying off your debt from the previous year. That would suck, wouldn’t it? How would you ever get ahead?
The key is to avoid holiday debt altogether. You can do this and still buy the things you want and need when you start saving for the holidays as early as you can.This plan can help you have the money you need for the holiday season! Click To Tweet
How to Start Saving For the Holidays NOW
So how can you start saving for Christmas now and still enjoy these next few months of fall? The first thing you want to do is make holiday savings a priority. There may be a lot of stuff going on right now in now in your life that requires money whether it be kids going back to school, birthdays, travel, home maintenance, work expenses etc.
You have to make room for Christmas savings somewhere in there and you can do so by paying yourself first. Open a dedicated savings account for holidays and start stashing away money on a consistent basis. The best way to do it is to make a savings transfer as soon as you get paid whether it’s weekly, biweekly or monthly.
Now, I know this is easier said than done. Having some accountability will really help so a fun solution I like to utilize is creating a savings challenge or plan for the holidays. One of my favorite plans is the 12-week Christmas savings plan.
A 12-Week Christmas Savings Plan
How this plan works is simple. You deposit money to your savings each week and by the end of the 12 weeks, you’ll have around $800 in your account.
Here’s what you need to deposit each week
Week 1 – $20
Week 2 – $65
Week 3 – $30
Week 4 – $75
Week 5 – $40
Week 6 – $90
Week 7 – $50
Week 8 – $100
Week 9 – $60
Week 10 – $100
Week 11 – $70
Week 12 – $100
Essentially, you’re just breaking down your large goal to save $800 into weekly payments to yourself. This makes the goal more attainable and fun to keep up with.
If you want to save on a monthly basis, you’d need to contribute $190 in Month 1, $280 in Month 2, and $330 in Month 3.
What to Consider
The 12-week holiday savings plan works because it motivates you to save a specific amount each week as you build up to your big goal. Plus, it’s pretty flexible so anyone can use it and find success. Here are a few things you may want to consider when using this plan.
Choose your own savings goal: In my example above, the 12-week savings plan is set up to help you save $800. However, you can change this number to better fit your preferences seeing as how some people may want to save more or less. Create a list of holiday expenses and Christmas gift lists so you can determine a realistic budget. Just play around with the weekly deposit amounts until you find what works for you.
Spread it out: This Christmas savings plan is just a guideline. If you start saving early, you can stretch out the plan for 16 weeks, 20 weeks, or whatever works best with your budget.
Determine a strategy to help you properly fund your account: You’ll be saving quite a bit of money in just 12 weeks time with this plan. It’s easy to tell you to pay yourself first, but what if you feel like there’s not enough money to meet the weekly deposit amounts? You’ll need to do a combination of lowering your expenses and making more money in order to hit your goal. On the bright side, you don’t have to come up with the money all in one month and can save over time.
It’s a no-brainer really. Start saving for the holiday now so you can truly afford it stress-free and be present with loved ones.
Have you started saving up for the holiday season yet? Do you use a savings plan or challenge to help you reach your goal?