I love Christmas because it give me a chance to decorate my house and take time off of work. This is also one of those times of the year that has historically pissed me off. As you know I used to work as a debt collector for a mortgage company. The most popular excuse for not paying your bills on time during December is Christmas. This irritates me for two reasons; 1.) Christmas isn’t really about presents and 2.) Christmas is the same day EVERY YEAR. Christmas doesn’t sneak up on you and all the sudden half way through November go BOO it’s Christmas. I understand Christmas is an expensive holiday for a lot of people but that is all the more reason to plan accordingly. There are a several ways you can prepare better for next year
Decide early on who you are going to be buying for. If you have a large extended family like I do it may make sense to draw names for gifts. My family has taken it a step further and agreed to only purchases gifts for the children. Set limits on how much you can spend on the gifts too.
Decide now how much you want to spend next year. I know it is a whole year away but this is where you start planning ahead. You need to know how much you want to spend on gifts so you will be properly prepared for next year. I would suggest putting a new line item in your budget for Christmas so you can monitor your progress as well as any spending you do throughout the year.
Once you have your goal amount in mind start setting aside the funds now so you will have the money to spend when it comes time next year. If you plan to start your shopping in November and want to have $600 to spend on gifts start setting aside $60 a month now. A good way to do this is with a goal oriented savings account. You could open a sub-account with INGDirect or there is SmartyPig which offers goal oriented accounts where you can currently earn 2.01% on your deposits. SmartyPig is designed for saving for specific goals. You can setup a direct deposit to transfer the money to your goal oriented account and track your progress. Saving in this manner will allow you to have a worry free Christmas next year. One of the best features of the accounts is the “Cash Boost” you can receive by withdrawing your money as a gift card for one of their bonus retailers.
Start shopping now. Ok well maybe not right now wait until after Christmas when people are trying to unload all their unsold Christmas goodies. You can pick up some pretty good deals for gifts next year. This is also the best time of the year to pick up decorations for next year. They can be 50% off or more. The more you spread out your shopping and your saving the more likely you are to fund your Christmas with little to no impact on your regular finances.