11 Simple and Easy Tips for Starting a Successful Christmas Fund
Holiday shopping doesn't have to be a time of stress and worry if you plan ahead. If you know you aren't someone who favors DIY gifts but still wants to spoil their loved ones then you should prepare in advance for spending. You can have a small income and still make this holiday one to remember.
Christmas is fast approaching and while there are other holidays in between ( Halloween if you don't consider it canceled in 2020 and Thanksgiving are also ones we'll later talk about in another post) Christmas is usually the one that leaves our wallets gasping for air.
It is the day that prompts us to make jokes like "I'm still broke from last Christmas" and while said with humor, it is very much a reality. One Christmas season, I had one fund that was an accumulation of random $20's, $50's and coins and this was all I had to my name.
If I was backed up on bills, needed spending money, or was loaning money to someone else, everything was out of this one area. So when I did my shopping and spent between $500 - $1000 on gifts my emergency fund/ sinking funds/ Christmas fund was empty.
I began the new year with zero dollars in my savings and no idea how to budget.
Keep reading to find out how to begin your own Christmas savings with just a few weeks left until holiday season while answering 11 frequently asked questions about the holiday season.
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What is a Christmas fund?
Money specifically set aside for the holidays. This means that once it's gone your shopping should be done and your other methods of saving or income would remain untouched.
For families that have a reliable steady income, having a Christmas fund may not be at the top of the list, but it is still beneficial.
For those who do not make as much money and often stress and worry around holiday time, this can be life changing for your health. Stress is known to manifest in fatigue, acne, headaches, lack of appetite and even overeating.
If you begin your Christmas fund with the first check in January you may have more money to spend on gifts than usual. Or you can set your goal and once you hit it, keep putting money aside for another reason.
How can I start one?
It's really simple to start.
What has worked for me is deducting $25 or $50 from my check. If there are 12 weeks left until December 19th you and you put $25 away a week you can save $300.
Keep in mind I am living off of a part-time income so if you make more money, look at your expenses and create your own savings amount.
Add up your expenses ( bills, child care, food, subscriptions, transportation) and subtract it from all sources of income you get per pay period.
From this amount you can decide what you can afford to put aside.
Maybe it's the amount you spend a week on lunch + coffee + after work snacks. Or how much you would spend on a monthly date.
What would planning ahead for the holidays look like?
Just answer a few questions.
How many people can you realistically buy a gift for?
What stores do you have access too?
Do you know what they want already?
Can you begin buying items now as different sales hit?
[Key word = realistic] You may want to get your partner and best friends family, the nice lady from church, and your neighbor from down stairs, a gift.
Once you know the who, what, when, where, and why of shopping you can pick stores. Some shops will have great prices, but only if you go early.
Buying gifts people don't want can cause you to buy more things to compensate.
How much should I spend on each person?
Now that you have counted the total amount of people, you can divide it by the amount you have or the goal you know you can hit.
I have to buy a gift for 10 people and I have $500 saved, this means my budget for each person is $50.
What if I spent over my budget?
You can deduct money from another persons gift, or see what is left to spend, how many people you still have to buy for, and do the math again.
The point of a Christmas fund is to spend the money you put aside specifically for the holidays. Try not to alter this amount if it means you are using a credit card that you can't pay off in full.
Should I shop online or in person?
You should have patience and do both. Shop online if you know what you are looking for.
Last year I only shopped online because I had a packed schedule and no time to spend walking up and down a mall. It backfired, because I had no idea what to buy and aimlessly purchased items I thought they would like.
But if you are purchasing an online only sale item for something you would likely buy in person, go for it.
Amazon tends to have nice lego sets and considering that a toy store will likely hijack the prices, I always shop online.
When it comes to clothes and shoes I am not a good online shopper but this method works great for those who know their sizes. You get to buy clothes that aren't likely to be seen in stores near you.
Should I wait for Black Friday?
Yes, if you can confirm that it will be cheaper around this time. The good news is that every year someone writes an article or makes a video about sale scams you should avoid.
Stores like NIKE will have great discounts on sneakers and sweaters. There are some family members that will only ever ask for a pair of Jordans, or a NIKE sweater, or $20 socks that go too far up their legs.
For those family members you can consider Black Friday shopping.
Should I use credit cards?
If you have a card with a zero balance this would be a great time to use it. You can stay on budget, and in a few days when the balance is posted on your account, simply pay the bill in full.
Not only will this reflect positively on your credit score but you already had the money stashed away so you don't have to worry about a bill following you into the new year.
What if someone spends more on me?
It's easy to get caught up in the idea of first Christmas's with your significant other, or trying to outdo the gift from last year but you should not try to live outside your means.
Buy gifts with someone
Another alternative is to coordinate with another family member and buy gifts together. If you both had $50 to spend, together you can buy a $100 gift.
In conclusion, the holidays do not have to be a time where you're reminded of how much you don't have. Instead you can plan ahead as much as your circumstances allow, and feel proud of your efforts.
Remember, the holidays are always about the people you're with, not what is bought.
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