Wednesday, February 6, 2013

Let's talk Christmas

Let's talk Christmas.
Yes, Christmas is a distant memory now, but in just 11 short months, it will be knocking on our doorsteps once again.

Don't get me wrong, I love Christmas!
The lights, the tree, the family get togethers...

And the gifts.

I love getting gifts and I love giving gifts.

But what no one loves is the price tag on all those gifts, especially if you put them on credit and have to pay for them all year long.

That's why Tim and I resolved a long time ago not to put Christmas on a credit card but to save up for it all year long.  That's right.  When Christmas is over for the year, we start saving for the next Christmas.

All. Year. Long.

This is how we chose to tackle that large Christmas bill:

1)  We opened a second savings account at our bank (thankfully, our bank lets you open up multiple savings accounts without any additional charge).

2)  We created a spreadsheet and budgeted for every Christmas gift that we anticipated buying. Our budget includes gifts for all our family members, gift exchange gifts, teacher gifts, "white elephant" Christmas party gifts, stocking stuffers, Christmas movie box items plus extra for "miscellaneous" expenses.

3)  We took that number, to total amount that we anticipate spending on Christmas that year, and we divided it by the number of paychecks we get a year.  That's our magic number.

4)  Every two weeks when we get paid, we transfer that amount from our checking account to our Christmas account.

That's it.  By Christmas of the next year, we should have enough to cover all of those gifts on our handy, dandy Christmas budgeting spreadsheet.

Some banks (ours included) offer a Christmas account option.  They automatically take part of your paycheck and transfer it over to a Christmas account.  You are then not allowed to touch that money until after Nov. 1.  These kinds of accounts are great for those who have trouble remembering to transfer money, or for those who are tempted to take that money out and use it for other things (hence, the "not getting to touch it until Nov. 1" part of the rule).

We have not chosen to do that but, instead, to transfer and save the money ourselves.  Why?  I prefer to have access to the money all year long.  That way if I see a great deal on something in August that I know someone on my list will love, I can go ahead and get the money out and buy it.

Our Christmas account works for us. Find what works for you and start saving for Christmas now.

In the coming weeks, I'll be sharing some other ways that we've earned extra money to help pay for Christmas and other expenses.

I'd love to know:  How do you handle Christmas expenses?  Do you have a Christmas budget?

1 comment:

  1. Like you,I have had a Christmas budget for years. But I have a Christmas club account. I can deposit whatever amount I want, whenever I want. If I need the money I can withdraw it for a small fee but since I am cheap, I, so far, have never withdrawn any. What I do, if I see something I want to buy someone before my check is mailed out, is buy the item and then adjust my next deposit accordingly. I then go to my spreadsheet and enter how much I spent next to that persons name so I can keep track. I love having Christmas paid for before Christmas !
    Love, Aunt Val