Are you thinking about Christmas? If you are like 99.9% of people, the answer is probably NO! I am sure there is a tiny percentage of people who want Christmas year-round, but no, I am not one of them.
Most likely, you are thinking about spring and warmer weather and anything other than Christmas. But here’s the deal. The best time to think about Christmas is NOW while it is still fresh in your mind. Think about the spending spree that just took over your bank account and the stress that followed. Go ahead, I’ll wait.
Ok, now that we all remember how crazy Christmas spending was, let’s plan for this year and ACTUALLY budget for Christmas. I don’t mean have a vague idea of how much money we are going to spend and then hope we can pay for it. Plan spending in each category for Christmas and start saving now so we already have the money before December.
Shocking Spending Statistics
It may seem like overkill, but drastic measures need to be taken to reign in the out of control spending habits we have developed for Christmas. Here are just a few statistics that shocked me. The results from a survey from the American Research Group stated the average planned Christmas spending for Americans was $983 for 2017. Not surprisingly, actual spending was higher than planned, and averaged $1054 according to CNBC.
What is most disturbing though, is that in the survey by CNBC, almost 75% of Americans said they failed to budget for Christmas spending. As a result, less than half (46%) said they could pay off their debt in one month, and 25% of Americans stated it would take them at least 6 months to pay off Christmas debt for 2017.
How does this happen? Christmas is not an emergency, and it doesn’t sneak up on us. It is a constant every year. $1000 is a large sum of money, regardless of your financial situation. It is irresponsible, and just silly to not plan for saving and spending your hard-earned money. Whether you plan to spend $50 or $1500 for Christmas this year, there are numerous benefits to making a plan now.
Benefits of Saving Ahead
There are many benefits for making a Christmas budget and saving the money before you spend it. Less stress, less spending, and less chaos in the weeks leading up to Christmas are a few of the highlights. Let’s break this down.
Remember at the beginning of this post when we revisited the spending spree that happened last year? The chaos of trying to purchase last minute gifts for people you forgot and hoping you had money to pay for it all? Imagine if this year looked completely different.
What if you had a list of the people you were buying gifts for made months in advance, or better yet, had all your Christmas shopping done before December 1st? Imagine having time to comparison shop, and purchase a meaningful gift for your loved ones, not just the easiest gift you can get in time. Christmas could be relaxing, without all the hustle and bustle of fighting shopping crowds and paying for overnight shipping because you forgot a gift. It is entirely possible when you plan and make a Christmas budget.
Everyone loves a good deal and wants to know they made a good purchase, but sometimes the “deals” in December aren’t really that great. When you plan for your Christmas purchases early, you can take advantage of amazing savings all year round. It just takes a little creative thinking, and a good gift hiding spot in your home!
For example: do you have a guy on your list that loves the outdoors or grilling? Purchase their Christmas gift during the Father’s Day sales in June. Have a lovely homemaker on your list who adores beautiful home furnishings? Shop the wedding sales for great deals on kitchen ware, linens and home décor. Are you looking to buy for a college student or want cute outfits for your kids? Make your purchases in August and September when clothing, small appliances, and other living supplies are discounted. Think about the end of season sales during the year and find a great gift for each person on your list.
Finally, the most important reason to plan for Christmas in February is for less stress. When you have your spending list made before the emotions from the holiday season run high, you can make logical decisions. In his book, “Your Best Year Ever”, Michael Hyatt devotes a whole chapter to “Activation Triggers”. He understands and explains that we cannot just plan. We must anticipate the obstacles we will face, and have a desired response determined in advance.
Basically, we need a safety net in place for the temptations that threaten to derail our Christmas budgets. What does this look like? A few examples:
- Not everyone who gives you a gift needs a gift in return. If they weren’t on your gift list then a beautifully written thank you is sufficient.
- A last-minute invitation to a Christmas party doesn’t mean a last-minute trip to the store for an expensive hostess gift and party food. Stock your gift closet throughout the year and keep easy appetizer supplies on hand during the holidays.
- Your daughter really wants the latest $300 gadget for Christmas. If it wasn’t in the budget, you don’t have to feel guilty for not buying it. Maybe you agree to pay for part and she pays for the other part, or help her plan to save for it herself.
It is so freeing to know that you have a plan in place that makes sense for your family and your finances. That might mean saying no to a specific present or party. But, I am certain this Christmas will be more peace-filled, more joy-filled and more purposeful when your focus during December isn’t on keeping track of presents and spending.
Christmas Cash Challenge
Now you know why you need to save for Christmas. But are you still trying to figure out how? It’s as simple as filling in the blanks. I have created a Christmas Cash Challenge worksheet that walks you through each spending category for Christmas. First, fill out as much information as you can from last year. It will give you a starting point for this year’s spending. Second, fill out your spending goals for this year.
I break it down into 10 categories so you can really see how you spend your money. Then, I give you a formula to determine how much you need to save this year, and depending on when you start saving, how much to save each month.
Where should you put all your Christmas Cash? There are several options.
- Open a separate free checking/savings account just for Christmas spending. (You can use the account to save for other projects throughout the year.)
- Withdraw the cash from your personal account each month and keep it in your safe.
- If you are very disciplined, you can try keeping it in your personal checking account, knowing that it is reserved for Christmas.
- Bury it in your backyard, hide it in the ceiling, or whatever you need to do to keep from spending it before Christmas!
Take the Christmas Cash Challenge and find out just how peaceful Christmas can be this year!
- Michael Hyatt, Your Best Year Ever, 207