Christmas Savings: The Best Way to Manage Money for the Holidays

Are you caught up in the hustle and the bustle of the holidays? The holidays can be a busy season for everyone with end-of-the-year festivities, traveling to see family, or serving local charities. Along with the crammed schedules also comes the craze of Christmas shopping. With all these festivities, it’s no wonder that your expenses can go up this time of year.

We want you to be able to enjoy this joyful time without having to stress over the financial burdens it can bring. To help you navigate Christmas spending with ease, we want to help you know the ways you can save your money in advance and be prepared for the holiday season before it is here.

What Are the Best Strategies for Saving Money Specifically for Christmas?

Have a Holiday Shopping Budget

The first step to wise saving and spending is creating a budget. If you haven’t made one yet for your finances, check out our Smart Budgeting Toolkit to learn how to begin. Budgeting for the holidays can reveal how much you need to spend on gifts each year and can organize your spending as you shop, so you can improve your money management.

Shop with a List

One of the best ways for you to make sure you stay on budget is to create a list that includes each person you are buying a present for, what they would like, and a maximum price for each gift. Knowing what you need to work with before you begin shopping around town or online can help you have realistic expectations for what you can afford. For example, if you do most of your shopping online, make an Amazon List where you can add each item to a list without purchasing. Before adding to your cart to purchase, you can total them all together to see if it is within your budget before making your final decision.

Don’t Wait Until the Last Minute

Stressful shopping comes with stressful spending. Give yourself plenty of time to prepare for Christmas shopping. The longer you wait, the more likely the items you’re looking for could be sold out or deliveries could be delayed due to high demand.

Open a Christmas Savings Fund

Since money can get tight during the holidays, there are ways to be proactive with your savings to prevent yourself from having to face financial stress every time they roll around. Opening a Christmas savings fund can help you save money throughout the year, so you don’t have to pull from your usual budget in November and December. Having one of these funds can be beneficial because you get to earn interest on your money.

What Are the Advantages of Starting a Christmas Savings Early?

The sooner you begin to save your money for the holidays, the better. While you could just set aside some cash every month, it would be ideal to put your money into a high-yield savings account or another interest-earning accounts where you can accumulate more as you save.

One benefit of saving early is you can take advantage of certificates, also known as CDs, where you could typically earn more money than other interest-earning accounts, but your money is required to be in the account for a certain time. For example, if you put your money in a certificate that has an 11-month required period, you could open your account the year prior to when you plan spending for the next year.

You can also use a Savings Goal Calculator to see how much you need to set aside every month to meet the deadline for when you need to start purchasing gifts or give donations. Starting early gives time for your money to grow and for you to contribute money over a longer period instead of being stressed trying to do it all at once.

How Can You Manage Holiday Expenses Without Going into Debt?

Stick to Your Budget

The worst thing you can do for your financial health is to have no accountability between yourself and your money. This is why having a budget is so essential since it reveals your saving and spending habits. When it comes to the holiday season, your budget will come in handy seeing how much you should spend on each gift and how much you are able to give to charities or your church. For example, you might be getting presents for your family and your in-laws. That’s already several people who you are planning to buy gifts for, but you know you also need to buy presents for your friends and for your work Christmas party. Even if you don’t plan to spend $100 on each person, those expenses can tally up fast. Budgeting can help you know:

• Total amount of money you can spend on all your gifts
• How many people you need to purchase gifts for
• Cost of gift per person, so you know where to limit yourself on each item

Holiday debt is 100% preventable; it just takes discipline and intentionality to make sure you are staying in your budget.

Newest Products? Highest Prices

While it’s tempting to purchase the newest or trendiest items, they might be very similar to the last edition. For example, if you are wanting to purchase a new Apple Product, compare the one from this year to the last. While there might be a few differences, the overall product might be just as efficient for a lower price. Keep that in mind with any new or trending technology.

The same goes for vehicles. The newest model of the car you’re interested in will be more expensive than models from previous years. It’s important to compare the pros and cons of each product before making a purchase.

Sleep on Your Decisions

Significant financial decisions like buying Christmas presents for your family or reaching a personal milestone like buying a new car is an exciting time. While these purchases are a financial investment, it is important to be self-aware of the emotional investment you are also putting into these decisions. Receiving gifts is a blessing, and being able to bless others is a gift. No matter what your budget is for gift-giving and donating, it’s important that you also are mindful of how much you are spending. It can be easy to get carried away with the many opportunities that tug at your heart strings, so having a budget can help you stay accountable to make sure you are able to give generously while being financially wise.

What Are Some Creative Ways to Save on Gifts and Holiday Expenses?

DIY Gifts

If you enjoy home projects or crafts, DIY gifts could be a much cheaper option for gifts, especially if you are intending to give multiple of the same for gifts. This can also be a fun project to do together with your kids, which can help teach them about saving and having fun while doing so.

Be on a Lookout for Deals Year-Round

While Black Friday and Cyber Monday are known for having some of the best deals for shopping, don’t limit yourself by only searching those days. Be open to searching during different sales to see which ones have the best prices.

Find Deals at Discount Stores

Stores like T.J. Maxx or Marshalls often carry name brands at lower costs. Whether you’re looking for clothes, kitchen appliances, or home décor, be sure to check out these kinds of stores to see what they have in stock.

Make it Fun Intentionally

While it’s important to have a budget and a list of what you need to purchase, that doesn’t mean you should take out all the joy of Christmas shopping. Have your spouse or friends come along with you as you shop to make it a fun, light-hearted experience. You can also keep each other accountable with your spending to remind you of your financial goal for saving.

Purchase Wrapping Supplies After Christmas

One expense you might forget about but is essential for every holiday season is supplies for decorating your presents. Depending on how many presents you need to wrap, the price for wrapping paper, gift bags, ribbon, tape, boxes, and any other items you need could be more than you’d expect. Be sure to look for any leftover wrapping supplies in stores the few weeks after Christmas to see if there are any discounts or sales.

Prepare for the Christmas Season with Leaders Credit Union

Do you feel financially prepared for this holiday season? We know there are many expenses that occur during the busyness of Christmastime on top of the ones you already have. The Financial Champions at Leaders Credit Union is happy to help you with any questions or concerns you have about managing your money for the holidays. If you’re interested to learn more about how to build strong savings habits, read our free Beginner’s Guide to Establishing Savings and also check out our other money management tools.

Leaders is federally insured by the NCUA.