‘Tis the season to start Christmas savings plans

Don’t you want to scream when you see Christmas displays in stores before Halloween? Or when “It’s Beginning to Look a Lot Like Christmas” has been stuck in your mind for two months as it starts playing in early November?

Christmas creep can be annoying, but there’s at least one good reason to start thinking about the holidays before the leaves change color: It gives you more time to save.

Given the current trajectory for vacation spending, you’ll need to have that latent savings.

National Retail Federation found Holiday spending up 14.1% Forking over $886 billion in 2021 to spread a little holiday cheer with American consumers.

Waiting until November or December to prepare for these expenses means you often incur fees on your purchases and pay them — plus interest — well into the new year. Instead, set up a Christmas savings plan now to avoid debt and overspending.

6 Steps to Build Your Christmas Savings Plan

Not sure how to put away the extra money for the holidays? Here are six easy steps to get you started.

Step 1: Start with the End in Mind

To save enough money to cover all your holiday expenses, figure out how much you plan to spend and how many weeks you have until it’s time to start shopping. This will tell you how much money you need to save per week to build your Christmas fund. In the personal finance sector, we call this setup a sinking fund,

Step 2: List the gifts

To estimate your overall savings goal, first make a list that includes what you’ll be shopping for and how much you’ll spend on each one. It can be helpful to mention what you spent last year. Or you can research the prices of the items you plan to buy and total them for each individual item.

Step 3: Double Check It

Be warned: Your Christmas savings plan needs to cover more than just gifts. So add the estimated costs of decorations, food and holiday events to your shopping list. Between special events where you gift a bottle of wine, gifts for your kids’ friends or an office Secret Santa, as well as actual holiday food, these “extras” can really add up.

How Much Should You Budget for Seasonal Extras? The average cost of wine varies from state to state, but there is a range $10-$15 a bottle, And if you want to bring the bakers dozen to the holiday party, Hello Fresh’s 2021 Christmas Cookie Price Index shows that the ingredients will cost you about $6.10 per batch.

Step 4: Do the Math

Total everything and divide it by the remaining weeks until you get to the store. Unless you’re a fan of last-minute shopping, this means giving yourself some wiggle room before December 25th.

To make things easier, we determined how much you need to save per week over a 12-week period to have anywhere from $200 to $1,000 in extra money for the holiday season. Statista indicates that the average American consumer has spent approx. $886 On Christmas gifts during the 2021 holiday season.

If your Christmas budget is $450, you’ll need to save $38 per week for 12 weeks. If you want to save $800 to meet your Christmas savings plan goals, you’ll need to set aside $67 per week for 12 weeks.

Step 5: Consider setting limits

Another tip for holiday savings is to determine how much money you can save and build your vacation budget based on that. For example, if you can only save $25 a week to go toward your Christmas savings, you can save $300 in 12 weeks. This will be your limit for all your vacation expenses.

If you think you’ll need more money to pay for all your Christmas expenses and still be debt-free, you’ll need to start saving earlier so you have more weeks to save. In fact, you can implement your Christmas savings plan anytime during the year.

Step 6: Set the Holiday Savings Aside

As you start saving for Christmas, it’s a good idea to keep your holiday savings separate from the rest of your money so you don’t accidentally spend them on your daily expenses. If you use a sub-savings account at your bank or credit union, set up automatic savings transfers each week to make sure you stay consistent.

if you take cash envelope Way, make sure you have an envelope dedicated specifically to holiday expenses and not other short-term goals. Set weekly calendar reminders to motivate you to put money aside.

2 tips to help you save money for the holiday season

When saving money in the short term, there are two basic strategies to consider.

Strategy 1: Cut expenses

Cutting the fat off your weekly spending is a good way to find extra cash for Christmas gifts. Figure out your budget and highlight all non-essential recurring expenses. Identify some — like fast-food dining or trips to the nail salon — that you can skip until you’ve finished your holiday shopping.

If you want to grow your savings fast, try no-spend challenge, Or cut your grocery budget by doing pantry challenge And plan meals with someone who is already at home.

Strategy 2: Generate Extra Income

Saving money for the holiday season isn’t just about making the cut. You can temporarily increase your income by doing part-time holiday gigs (bonus if you get a company discount) or odd jobs on Fiverr or TaskRabbit. Or turn your hobby into making and selling something cute and crafty on Etsy. And don’t forget to make room for the new goodies you get by clearing out your closet and selling stuff online.

How to Save Money on Gifts During the Holiday Shopping Season

Apart from the Christmas savings plan, you also need to set a Christmas budget that is financially convenient for you.

Here are seven ways to spend less this holiday season:

1. Make your own gift.

Get crafty and DIY some Christmas gifts for your friends and family.

Worried that your homemade gift will look kitschy? try our 100 Holiday Gift Ideas That Won’t Cost You A Dime Affordable gifts your friends and family will cherish.

2. Shop early and take advantage of sales.

Instead of waiting until you reach your Christmas savings goal, you can use the money you save to buy gifts whenever you catch something on sale. Bonus if you have saved any coupons.

Buying early this year can be especially important because Supply chain concerns continue, The adage “time is money” rings true during the holiday season when finding popular Christmas toys can be challenging.

3. Use old gift cards.

It’s easy to forget about the gift cards you received long ago that still have balances. Dig out your cards and check the balance. Buying a gift with your gift card will free up cash to use for something else.

Can’t find the right gift to use up your gift-card balance? Check out our tips on best sites to sell gift cards And turn that plastic into cash.

4. Cash in on your credit card rewards.

If you get cash back or points for swiping your credit card, save them to use for your holiday spending. Just be responsible for your credit cards so you can triumph in a debt-free Christmas.

See our recommendations for Best Cash-Back Credit Card,

5. Apply the four gift rule.

Save money by limiting the amount of gifts you give to your kids. four gift rules It focuses on getting each child just four things: some they want, some they need, some to wear and some to read. Plus a little bonus from Santa, especially for the little ones.

Read more about the Four-Gift Rule Here,

6. Compare Shop Online.

Do your holiday shopping online and compare prices to get the best deals. some browser extension Will also do savings work for you. Be aware of shipping costs when shopping online. These stores offer Free shipping with no minimum order,

7. Set up your calendar for sales.

It’s easy to browse and then forget to circle back to the sale. Set an appointment on your calendar to remind you when holiday sale prices start, especially for big-ticket items like electronics.

Not all holiday sales are created equal. Use our guide to best time to buy everything To nab the best deals first Cyber ​​Monday or Black Friday,

Kaz Vida is the senior author of The Penny Hoarder. Nicole Dow is a former senior writer.

This article is originally from . was published by penny hoarder,

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