You Need to Start Saving for Christmas Now

Christmas SavingsFall is in the air! The weather is turning colder, it’s getting darker sooner, and by some environmental freak of nature, my new driveway is positioned perfectly to allow maximum ice build up on my wind shield. Most of us are probably starting to think about Thanksgiving, Halloween, and getting out the winter gear. Less of us are thinking about the holidays, buying presents, and how we’re going to budget for the month long extravaganza that is Christmas in many north american homes.

That needs to stop.

Christmas is only twelve weeks away, and that time is going to fly by faster than  my paycheque flies out of my account every week.

Does this sound familiar? You’re a great gift giver, you’re thoughtful, you buy things that will be meaningful AND useful. You’re in the mall and you spot the perfect gift for so-and-so. You can’t pass up the opportunity, so you put it on your credit card even though you haven’t quite started saving money for Christmas yet. Who cares? You’re good with money, you’ll pay it off before the interest kicks in, after all, it’s just one present. Except this happens again. And again. And again. Eventually you’re done your Christmas shopping, having put every purchase on your card, while making half hearted payments to get rid of that now hefty balance.

This used to be me every year. I always figured out a way to pay it off, but it’s typically a scramble to come up with the money. I know I’m not the only one, and often people don’t even begin to pay the balance back until after the new year.

Which is why you need to start saving for Christmas right now. Not tomorrow, not in a few months, not after black friday, right now.

I typically spend $500 a year on Christmas. That’s below average for Canadians, but with a little DIYing and clever shopping, I can make that budget cover all of my essential gift buying. What I find amusing, is that before I started saving early for gifts, I had no idea what I spent every year. Saving early requires some kind of savings goal, which then becomes my gift budget. I spend less this way because I actually have to plan my purchases, instead of waiting for inspiration to strike. It makes me a lot more organized about the whole thing.

This year, I started saving that $500 at the beginning of September. Instead of scrambling to get it all paid off after the new year, I’m dutifully transferring $30 of my paycheque every week into a separate account labelled “Christmas Fund”.

Scrambling to pay the Christmas bill is no fun. It involves cutting back in other areas and may even delay other events that you were so looking forward to. But $30 per week? That’s entirely doable. That’s a small sacrifice to make in order to be able to spot the perfect gift and buy it without another thought.

Every year, people get caught unprepared for the holiday season. I was one of them for a long time. But excuse time is over. We know it’s coming, we know how much it’s going to cost, why not be prepared? Being prepared is way cooler and less stressful than waiting until the last minute to scrape enough money together.

Have you started saving for Christmas yet? How much do you typically spend? I want to know!

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  • John S @ Frugal Rules

    Great post. We actually take money out each month to have it go towards Christmas and birthday shopping. Then, when the time comes around we have the money to go towards it. We just use our credit card to earn rewards points and then pay it off with the cash we’ve saved throughout the year. My wife and I found that before doing this that we’d just overspend and end up wondering where the money was going to come from.

    • Jordann

      That’s a really good idea. Maybe when I’m out of debt I’ll be able to do this.

  • Modest Money

    I never really save for Christmas ahead of time, but then again I never carry a credit card balance even around the holidays. So I guess this isn’t really a problem for me. For people that do end up carrying a credit card balance because of holiday shopping, it would make a lot of sense to save up beforehand. It could save a lot on interest. As for how much I spend, I think about $500 sounds right, but it depends on who I’m spending Christmas with.

    • Jordann

      If you don’t have a problem funding Christmas, then saving up doesn’t really need to be a priority. But if you’re like me and on a super tight budget, saving up is key!

  • Michelle

    I haven’t started saving yet, but we’ll be fine either way. December is a 3 pay check month for the both of us so that’ll bring in tons of extra money.

    • Jordann

      I love extra pay day months! Unfortunately all of my extra money goes to debt repayment, just another thing I can look forward to when I’m out of debt!

  • See Debt Run

    We’ve already started budgeting for Christmas this year because we have to! We’ve also got our oldest’s birthday that month, and he has no interest in toys anymore–only expensive electronics. In the past, we’ve spent entirely too much on each child for Christmas and birthday gifts, but this year, we’ve got an idea for the oldest that I hope he’s okay with. It’s going to end up costing us nothing. Wish me luck please! And good luck to you keeping to your budget as well! You sound so sweet and thoughtful that you’re always finding perfect presents for your loved ones. I don’t have that much ease picking out gifts unfortunately. I always try, though, and I think that I’m a good gift-giver….I hope!

    • Jordann

      It’s the effort that counts! I just look at gift buying like a cool fun challenge instead of a chore. It makes the process fun and like a hunt for the best item. If you don’t like shopping though, it might be hard to make it fun.

  • Mo’ Money Mo’ Houses

    Yup, totally agree! I’ve started putting away for Christmas and usually do the bulk of my shopping in November so I can actually enjoy Christmas instead of panicking about getting people gifts.

    • Jordann

      That’s a good idea! Last year I did all of my christmas shopping in one weekend – Dec 16th, it was the closest I’ve ever cut it.

  • cherie

    Like John we have a ‘gift’ budget that gets set aside monthly – some months I don’t buy any LOL – some months I buy a lot – it goes for birthdays, weddings, christmas, baby gifts etc

    • Jordann

      That’s a good idea! Unfortunately for me, I’m pretty stretched anyway so adding another line item in the budget isn’t really an option.

  • bogofdebt

    I started my Christmas fund in May. The amount varies but I set a set amount per person and with some other stuff that may be needed and set the plan for that. It’s working out pretty good-we actually have started Christmas shopping and seem to be doing good so far. Right now, we’re waiting to see what the plan is for his family (last year we picked names and that was great but this year, we’re not sure what we are doing. They have a brand new baby so it might turn to be don’t buy anything for anyone but the baby which would be helpful).

    • Jordann

      I love exchanging names, my family has done it for ages. As for the new baby, I have 13 nieces and nephews so my policy is to not buy gifts for any of them.

  • SWR

    Between $750-$1000 (that’s our combined spending on gifts). I’ve already started planning my purchases. My siblings and I are all broke students, so we tend to go in together on gifts for each other and the parents. Normally I would have already started saving up, but a bout of unemployment this summer kept me from being able to.

    • Jordann

      Going in together for gifts is a great way to get a spectacular gift without breaking the bank. Good job being thrifty!

  • Budget & the Beach

    I guess I’m sort of lucky in that I don’t have to spend much beyond Christmas cards. I have a small family. My parents don’t expect much. My brother and I just do cards, and that’s pretty much it. Christmas in general is my least favorite holiday. I think in theory I’d like to have people to spend money on…a significant other, nieces/nephews…but that’s just not the case. Thanksgiving on the other hand I LOVE!

    • Jordann

      That’s very lucky! As far as families go, mine isn’t super materialistic, but there are still gifts that must be bought. I think simply exchanging cards is a great idea.

  • Savvy Scot

    We spend around £1000 – $1600 in total. Your post has made me realise just how close we are…. Got to get planning :)

    • Jordann

      No time like the present! (no pun intended)

  • Drop that Debt

    I am planning to make homemade gifts this year for much less, but this is the first week I’m truly getting excited for Christmas !! I am going to start looking and plan out everything I need to make for everyone, and then start budgeting for the cost of it all as soon as I’ve figured it out. I’m hoping to get away with less than $500, if the bf and I buy each other gifts (though I did suggest we make) that’ll be $100-200, and hopefully 100-200 to make everyone elses gifts!

    • Jordann

      Sounds like you’ve got a plan!

  • MakintheBacon$

    I would love to do a gift exchange with my bf’s family and my own family, but I feel like they wouldn’t really be down with that idea. My bf’s family really likes the holidays and the gift giving. I think my mom and I are the only ones who think the holidays are too commercialized. Its so stressful trying to find a useful practical gift or a gift they will like. I haven’t started saving yet for Christmas. But your post has definitely got me thinking about it. Ha. Ha.

    • Jordann

      Some families are definitely more gift oriented than others. I’m lucky enough to end up somewhere right in the middle.

  • Mikhaila

    I just spotted a scarf that I’d love to get for a friend for Christmas, and realized that yet again I haven’t started a Christmas fund. I’m going to add an automatic deduction starting next paycheque – thanks for the reminder! I don’t think people realize that it’s only $30/cheque to save $500 by Christmas (that makes me sad and happy, I can’t believe Christmas is only three months away!).

    • Jordann

      A little bit now makes up for a lot of pain later, plus, you can start buying your gifts now, because you’ll already have a little saved up.

  • Kelly

    This is the first year ever that I’ve saved for Christmas ahead of time! I try to keep my budget around $350 because that’s all the money there is! It means that my gifts aren’t as lavish, but I can actually afford them! I’m lucky that my siblings and I do a gift exchange and my nephews are little, so they aren’t too picky.

    • Jordann

      Gift exchanges are amazing when it comes to keeping costs down. My siblings and I started to do it when we were all in University and broke. Now we keep it up because it’s what we’re used to. It’s a great tradition to start!

  • Vanessa

    Save, save, save but also buy presents throughout the year :)

    • Jordann

      That’s definitely a good bit of advice, there’s much less panic when you’ve got most of your gifts covered early in the year!

  • Daisy

    I so agree. It’s important. I think I’ll start shopping next weekend. I have a 3 paycheque month in October so I think gifts will be coming from that!

  • OutlierModel

    We spend about $300-400 each for Christmas. Our tactic to is to save a bit of gift money each month throughout the year ($50/ month), which gives us enough for birthdays and Christmas. :)

    • Jordann

      A bit of money every month is a good idea, I always have to scramble when it comes to birthday presents.

  • Anne @ Unique Gifter

    My typical spend has increased, a lot, with my income. Plus, there’s more people to buy for now (ie, brother got married, I got married, we’re “adults” who buy the cousin’s kids toys when we see them at Christmas, etc). I would guesstimate that I/we drop around $1100, so that’s sort of in line with your $500, but only if your $500 is only for you!

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