Christmas In July

It may be July, but before you know it, the holidays will be here. Instead of hustling to earn extra cash around Christmas, or getting into debt, why not prepare now? Here are a few things you can get started with to ensure you pay with CASH and not be stressed out during the holidays!

Determine Your Budgets

You actually need 3 budgets. One for food, one for decorations, one for gifts. It took me a long time to figure this out. I’d plan for gifts, but not for food and decorations – ending up broke and scratching my head as to why!

Food Budget:

Ah, yes, the turkey, dressing, yams, mac n’cheese… mmm… mmm. Your holiday food budget is often for one day, you have to add in extra money to cover that day PLUS your normal grocery bill. I shop for groceries every two weeks, always have. I remember one year where I spent all my regular grocery money on Christmas dinner…not good since that food didn’t last two weeks!

Decorations Budget:

You have to think about decorations for the inside and outside of the house.  I’m a sucker for beautiful Christmas decorations. I love the lights… sigh… but it can certainly all add up! Take inventory of what you already have and what you’d like to get for this year. You can easily order online if it’s not in the stores yet.

Gifts Budget:

It’s time to make your list! Start asking family, friends, or other loved ones what they want for Christmas. Make a list, and do some price comparisons. Are you able to afford those gifts? Can you find a cheaper alternative?

My husband and I set aside a certain amount we want to spend on each person. If what they want doesn’t fall within our budget, we buy something that does.

For example:

Mom                $50

Dad                  $50

Kid 1 –              $200

Kid 2 –              $200

Coworker –       $25

Secret Santa – $25

Total:              $550

A list will hold you accountable and keep your spending in check along with keeping you from wondering if you’ve missed something.

Check Your Savings

Do you already have money saved? If not, it’s time to start from scratch. If you do have money saved, you have to decide if you want to put a portion of that towards your Christmas budget. Once you’ve assessed your savings, you can see how much money you need to save to reach your holiday budget goals.

For example, if you decide you want to spend $1,000 for Christmas and haven’t saved anything, you have about 4 months, or 16 weeks, to save it. So you would need to save about $63 a week to reach that $1,000. You can set the money aside in a Christmas Savings Account at your bank or other savings separate from your normal accounts. The best thing you can do is automate this savings or things will always come up to spend the money on.

If the amount you came up with seems like a stretch – scale back on the amount you spend and number of people you buy for. You can always sell a few items you no longer need, work a few extra hours a week, or even cut back on spending for a little bit. 

Just Start

You’ll never reach your goals if you don’t just start!  Christmas isn’t a surprise. It happens every year on the same day. It should be a part of your financial planning from year to year – just like it is for my aunt Frankie. She starts saving as soon as Christmas is over each year, she puts a little away in her Christmas Savings Account. By October, she’s done saving and starts shopping! 

When you prepare for the holidays ahead of time, you are not only setting yourself up for success, but you are also taking a lot of stress off yourself to do things at the last minute. Whatever you do, please don’t charge for any of it. When the cash runs out, you are done, otherwise you’ll be paying for one day all year.

Alright, what tips do you have for saving for Christmas? I’d love to hear how your Christmas in July planning goes!

Dorethia Kelly, MBA is the president of Conner Financial Coaching, LLC, providing results-oriented personal finance and business coaching services. She is also the founder of the popular #MoneyChat personal finance blog, and online Twitter chat hence the inspiration for… #MoneyChat THE BOOK! How to Get Out of Debt, Manage Your Money and Create Financial Security! Get your copy on Amazon today!

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