How Much Do You Have Saved For Christmas Gift Spending?

I’m a huge advocate of setting money aside for bills or expenses that come due on an irregular basis.  Your cable bill is easy, you pay that every month, and it’s generally going to be the same amount for at least 6-12 months at a time.  Your electric bill might a little trickier since, even though you’ll have one payment per month, the payments will be uneven due to the varying usage that you’ll have because of air conditioning and the like.  Still, it’s manageable.

But what about expenses that come due on an irregular basis?  Like Christmas gift spending.

mb-201307giftToday is July 25th, so it’s about the closest you’ll come to ‘Christmas in July’ that I can think of.  Which, by the way, is there any basis for this phrase other than my guess, which I’d think ties to retailers trying to drum up sales during what are often excruciatingly slow summer sales months?  Well, since it’s ‘Christmas in July’ day, I thought it would be a great idea to focus on the expenses, and check to see if you’ve started saving yet, and let you know how we’re doing.

What’s The Big Deal?

The big reason for saving now is because of the sheer cost involved.  Let’s face it, Christmas and the holidays have grown in size to where many retailers count on making all of their profit for the year during the Christmas selling season.  Think about that, many places you visit on a regular basis are not making a single dime for nearly 11 months out of the year….and they’re OK with that.

But, with this comes the urge to spend more and more.  And we do.  Sales around the holidays have grown steadily for the last couple of years as the economy has improved, and this means that you’re probably spending more.  Spending around the holidays can add up to some big bucks, and it’s best to make sure you can afford your purchases, and what better way to ensure this than to have money specifically for these purchases.

Is It Too Late To Start?

The answer here is, no!  It’s never too late to start saving for Christmas.

What’s The Point?

The biggest reason for saving for Christmas is to avoid coming out of the season with credit card debt.  Let’s face it, there are a lot of purchases and the temptation is to swipe the card at every store.  Still, those purchases add up quickly with the number of gifts you might have so that Santa gets everything crossed off his list.  Many people find that their credit card balances swell around this time of year, something that the credit card companies are all too eager.

What’s The Impact?

The impact of letting this happen is that you’ll pay more for the gifts you’re buying than what you pay at the register.  That $40 sweater for your mom might turn into $60 or $70 by the time you pay it off and add in the associated interest charges.  As you shop, ask yourself, is this item worth double the cost on the tag?  Most times, the answer is ‘No’, so don’t get tricked into paying that anyways!

But I Know I Can’t Save Enough, Should I Bother?

If you’re in the middle of enjoying the hot summer temperatures, winter and Christmas shopping may seem forever away. That is, until you realize that even if you started saving $100 per month today, that’s not going to cover the $1,000 you plan on spending on Christmas gifts.

So, the temptation is not to bother.

Big mistake.  You should definitely bother! 

Even if you only save half of your planned spending between now and then, you’ll be cutting the amount of interest you pay in half.  It doesn’t have to be an all or nothing thing, because if you choose not to save it, chances are you’ll find something else to spend that money on instead, and you’ll be that much further behind.

In some cases, doing it halfway is better than not at all.  This is assuredly one of those cases!

Won’t This Make Me Just Spend More?

If you normally spend $1,000 on Christmas, and this year, for the first time, you set that aside, you’re going to feel pretty good about that.  So good that it might be tempting to increase your budget a bit.  After all, it’ll be easy to justify spending an extra $500.  After all, you’re so used to paying interest that this is going to mean you can spend more and only pay half the interest.

Don’t do it.  The whole point of saving for Christmas up front is to keep your money in your pocket.  As much as possible.

How Do I Make This Happen?

If you think you could fall into the trap I described above, then in addition to saving, you should start setting a budget.  Now.  List the people you need to buy gifts for, and set a budget.

Then, find a way to stick to it.  Hold yourself accountable when the time comes to spend that money.

How Am I Doing?

We stared saving for Christmas throughout the year several years back.  This has helped us out a lot.  We set aside around $70 per month, and we also allocate a portion of our tax return for our gift fund.  This definitely makes Christmas shopping a lot easier.  Let’s face it, the holidays are stressful enough without having the added stress of worrying about how you’re going to pay for those gifts.

So, do yourself a favor and start saving today.

Readers, do you save for your Christmas purchases throughout the year?  If so, what’s your strategy and how are you doing?   Happy Christmas in July!

23 thoughts on “How Much Do You Have Saved For Christmas Gift Spending?”

  1. We do exactly what you are proposing for our Christmas spending. We start saving in January and set aside some each month. As the months get closer, we set aside a bit more in October and November. We are able to purchase all of our gifts for our 4 kids with the money we save through the year. The best Christmases are the ones you are not paying for after the fact come January and February.

  2. It’s hard to think about Christmas in July…..but if a person can force themselves to do it, even just a little bit, it can help SO much once December rolls around. We’ve had years where we wait all the way until December and then we have to commit all our discretionary funds to gift purchases – YUK. I remember my mom had a babyfood jar in my parent’s room in which she put some money into each week. When December rolled around she was all ready to buy gifts – I WISH I could be that disciplined!

    • It is, though the temps here haven’t been that warm so it’s not like a normal July where we’re sweating through it. Cooler weather reminds that the holidays will be here closer than we think!

  3. I have actually never thought of it this way. I mean, christmas rolls around, the spending starts and sometimes I overdo it, not intentionally ofcourse, just happens. Its an awesome idea and I think I’ll start stashing something away for Christmas, then try stick my budget to what I have saved 🙂

    • If you haven’t started saving already, start today! You’ll thank yourself for it later.

  4. Saving for Christmas sure beats the heck out sweating January through June paying off the CC bill. The other note I’d add, if I may, if you have kids – look at ways to cut back your spending – time with your kids is far more valuable then any amount of “stuff” you could ever buy. Before I got financially fit – I was a single dad with two small boys and no money. For Christmas we had a small tree, two or three small gifts (usually a game or model we could do together) and a handful of “coupons” to spend time – “30 minutes of playing catch with Dad” or “Wrestling showdown with Dad – winner gets out of making the bed for a week” (and you know they always won!). Now my wife and I make candy for relatives during the holidays and we’re still giving the kids coupons. Let’s get back to the kind of Christmas where time together was more important than the latest game console, handheld device, big screen tv… my two cents! Great Post!

    • I agree. We do spend a lot of time thinking about what to get, though honestly my favorite memories of the holidays from being a kid were the moments and the family I got to saw around the dinner table and such. Good reminder!

  5. Great advice! A very long time (40+ years) ago, I started a savings account with a payroll deduction. It was for those annual expenses such as insurance, real estate taxes and vacations. It made annual expenses much easier and took the worry out of .the process. As my expenses changed or increased, I just changed my payroll deduction.

  6. Christmas is waaaaaay more enjoyable when you have money set aside. There is nothing like not having to finance Christmas with credit!

  7. July 25th and our Christmas shopping is approximately 50% completed. We have never gone into debt for presents. Shopping is generally completed by middle of November. We love being able to enjoy the season without stress. In recent years, iPads, iPods, kindles, flat screen televisions, bicycles, etc. have been high on the list. As a newly retired person and having a husband who will retire in 6 months, we are rethinking gifting practices. Our grown children are on board with new limits. Thanksgiving has always been our family favorite holiday!

    • Early shopping is something I can never pull off so I give you double props for having that pretty well covered on top of a plan to afford it all!

  8. I spend very little on Christmas so there isn’t any need to save money for it. Most people know that I don’t want a gift and therefore I don’t have to get them a gift in return.

  9. Honestly, I don’t have money saved but I have some gift cards and I shop all year when I see good stuff at a good price that I know people will like. I only need to shop for my brother and mom now. She only uses CDs so I wait til the end of the year because she might buy what i had picked out for her in the meantime. Mostly everyone else is done now.

  10. I can’t believe you’re talking about Christmas right now!!!!! Anyway, you’re smart to start thinking about it because it can be expensive. We simply save all year anyway, but don’t go too over the top at Christmas so nothing is really a budget breaker.

  11. I deposit money in my ING account every month for this. I had some money left over from last year, so I actually started in Dec. I use a zero-based budget, so this is all figured in. It works out well.

  12. Work prevents me from buying stuff ahead. I hope I get to do it this year, though. Thanks for the reminder. Ha!

  13. A couple of years ago, I started having $75 a month go into an online account that I don’t see every day. It isn’t necessarily set up for Christmas gifts, but for those irregular expenses that come up once a year. Whenever I do log in and look, I’m always pleasantly surprised, and it’s much better than putting Christmas on the credit card without knowing you can pay it off. It is actually pretty painless. After the first couple of months, I don’t even really notice that money is gone from my regular account.

    • That works. I’m too type-A when it comes to my finances to leave it that general, I have to break it down into more manageable pieces.

  14. I’ve always like this idea, I’ve just never been able to get myself motivated to do it! Last year, we did something totally different for Christmas – we used the money we would spend on family and donated a ton of presents to a foundation. We will probably do something similar this year. We spent a little less than previous years (under $800) and our family supported us. Maybe I’ll get motivated and start saving early. 😉

    • As long as you’re not donating to the Human Fund (Tagline: Money for people), it sounds like a great plan!

  15. I shop all year round by hitting up clearance deals. I’m all done with my Christmas shopping for December already! Do it every year and it keeps from making Christmas time a burden!

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