In the aftermath of the Christmas holidays, there are a few tasks to be completed before we move on. Decorations must be neatly packed away, cards recycled or made into tags to adorn future presents, and bills have to be paid. January is a long month to get through but, if you followed our tips for planning for Christmas in October, you should be in reasonable control of your finances at the start of the next year. With that said, it is never too early to start thinking ahead to the following year’s festivities and budgeting appropriately.
The best way to grasp control of Christmas planning and spending is to start a holiday savings fund in the new year. Rather than trying to squeeze holiday shopping into December’s budget, if you get a jump on your planning early, you’ll have a much better experience.
What is a Christmas Savings Fund?
A Christmas Savings Fund is money saved specifically for all things Christmas. You can put money away for gifts, entertainment, food, decorating, and any other aspect of the holiday beforehand. This will ensure that you’re not scrambling to find bargains and funds at the last moment when you should be enjoying yourself instead!
Setting up a Christmas Savings Fund in 6 Steps
Step 1: Make a list
Start with basic categories, like Entertaining, Gifts, Cards and Wrapping, Decorations, and Food. From here, you can make a list of what you need to buy for each category. For example, with the Gifts category, include every recipient you plan to gift. Decide what to give each person and set a spending limit for each item. Your Food category could include a full list of groceries or sublists for each event you’re catering for.
Step 2: Do some research
Are there items that can be purchased more cheaply now instead of near Christmas, such as non-perishables, wrapping paper and cards, and so on? Identify where can you make savings.
Put a note in your diary when you want to start shopping for particular items ahead of the rush. If you grab items when there is less demand for them, you’ll save money and cross off a future shopping task.
Take a look online and in-store for items you’ve listed. Gifts, cards, and wrapping paper are often reduced in the new year. Use voucher codes or cashback sites to save money as you purchase; the proceeds could be added to your fund.
Step 3: Formulate a budget
Now that you have thorough lists for each need during the holiday season, and have researched areas you can save, assign a rough estimated price to each item, then each category until you have a total sum. Refer to your previous year’s spending as a guide.
Step 4: Figure out a savings plan
With your total sum in mind, calculate how much you need to put away every month to achieve your goal. Simply divide your total by the number of months left until Christmas. That’s how much you need to save each month. Of course, you can save more each month if you can afford to and would like to get ahead!
Step 5: Put your plan into action!
As you save money, keep a tally of what you’ve saved and where each saved dollar is going to go. or has been spent This will keep you on track from month to month as you head towards December.
Step 6: Tweak as necessary
Your budget needs or income may change. Keep close track of your numbers so you can make tweaks and changes as soon as the need arises rather than after the fact. The closer you get to your savings goal, the better off you’ll be in the long run.
A holiday savings fund simplifies the planning process, preventing you from becoming overwhelmed at the last minute!