As temperatures continue to rise across the nation, Christmas may be the furthest thing from your mind. However, if you tend to struggle financially during the holidays, thinking about this winter occasion may be the smartest thing you can do this summer.
According to a 2017 survey, 90 percent of Americans celebrate Christmas. But, they also racked up an average of $1,054 in debt just during the winter holiday season.
Additionally, 74 percent said they didn’t budget properly for the holidays, which may have led to their debt increases or, at least, some financial strain.
If you start saving for Christmas now, you can gather quite a nice nest egg. Then, you won’t have to dedicate as much of your November and December paychecks to buying gifts, planning parties, or even buying a beautiful tree. Plus, it may allow you to avoid adding to your debts.
Without very much effort, you can begin planning for Christmas in July. Not only will this holiday season easier to manage, but it can also be fun, especially when you start picturing exactly where that money will go. If you want to get a head start on the winter holiday season, here are some tips to get you started.
Transfer Money Monthly to a Separate Account
Many people have a checking and a savings account. When you spend money, you use checking. When you need to set some cash aside, you move it to savings.
While this is a generally good plan, if you are saving toward multiple goals, the purpose of your stashed away funds gets a little muddy.
Instead of only using one savings account, consider opening a new one just for holiday expenses. Then, you can see exactly how much you have available without having to account for other savings goals.
Ideally, you want to open an account at a bank or credit union that isn’t your primary financial institution. This makes the money harder to access, decreasing the likelihood that you’ll dip into it for other reasons. Since the money will be sitting awhile, look for high-interest savings accounts. That way, you can earn a little interest between now and Christmas. What better time than to start saving than starting to save for Christmas in July.
Once your account is open, you’ll want to set up a monthly transfer. If you know how much you want to spend this Christmas, divide it by the number of months remaining in the year and save that amount every month. You can also split the total of what you want to spend by the number of paydays you’ll have before Christmas then schedule that amount as a deposit for every check.
Start Your Retail Christmas Shopping Now
Though it may seem counterintuitive, shopping now can actually help you save for Christmas. How? By purchasing a gift or two a month until Christmas arrives.
If you have ideas of what your friends and family members may enjoy, then consider which items are storable. Then, examine the price of each item and divvy the total cost out over the next few months by buying a few gifts at a time.
In some cases, you may even be able to save money by monitoring store sales over time or by purchasing the proper items in each season. For example, if you want to buy a small appliance as a gift, like a high-end coffee maker, consider waiting until September. Many appliances go on sale near Labor Day, so you might get a deal. Looking to give a laptop as a gift? Try shopping the back-to-school discounts in August.
Cash Out Your Rewards
If you have a rewards credit card and haven’t checked your points balance in a while, consider taking a look today. At times, you may find out that you can get cash back or use the points to buy gift cards, giving you the chance to use these funds for Christmas.
For rewards cards that have a store where you can “buy” items with points, check out the catalog and look for gift options.
Why would you want to do this now? Because it can sometimes take a long time to get your rewards.
Items like e-gift cards and cashback applied to your balance may take days or weeks to show up. Cashback by check will likely take weeks or months before it’s in your mailbox. Physical products typically take months to arrive.
In some cases, the length of time you have to wait varies depending on the number of people buying items with points. This means that, as the holidays draw near, wait times can be even longer.
If you’re looking at physical items, consider ordering them now if you can store it until Christmas. That way, you have around five months for it to make the journey. E-gift cards and cash back can also be useful now, especially if you can use the gift card to buy presents or deposit cashback funds into a savings account that earns interest.
Look for Gift Card Deals
Some stores and restaurants offer deals on specific gift cards. For example, you might be able to get a certain amount free after making a minimum purchase or receive a discount at the register that makes the gift card worth more than you paid.
When you look for gift card deals, don’t just focus on those that can be used as gifts. Instead, consider where you may shop for presents as well as where you handle some of your household’s shopping.
If you find a discount for a store where you’ll buy presents, make sure you can spend the entire gift card amount on the purchase, so you come out ahead and don’t have an amount lingering on the card. If you find gift cards on sale for stores where you usually shop, use those for your household expenses and redirect the savings to your Christmas fund.
All of these approaches can help you spread out the costs of Christmas as well as result in a net gain.
Hit Some Yard Sales
Many people would believe that shopping at garage sales to save for Christmas seems odd, but it can actually work quite well. First, you may be able to find some holiday décor at amazing prices, as people don’t generally consider the season when eliminating unwanted household goods from their lives.
Additionally, if you have a friend or family member that loves vintage items or collects a specific kind of knickknack, sometimes you can get lucky at yard sales.
DIY gift givers may get their hands on excellent finds at garage sales, particularly if they are competent upcyclers. You might find the precise building blocks you need for a present, and you’ll have plenty of time to get the work done.
What are your thoughts about saving for Christmas in July? Tell us about it in the comments below.
Looking for more great articles? Here are a few more for you to enjoy:
- Smart Ways to Save for College
- Sofas in a Box – Making Luxury Couches Affordable
- Living a Rich Life While Broke Isn’t Impossible
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