How To Save For Christmas Without Going Into Debt

Okay, so we’re in the middle of the holiday season and gift-giving is in full swing. So perhaps this isn’t the best time to talk about how to keep from overspending at Christmas in 2022. However, it isn’t too early to take the pain of seeing the January statements and apply this toward better stewardship in 2023. Here are a few ways to make 2023 holidays more joyful and less stressful when it comes to spending.

Use A Savings Account Or Christmas Club Account

  Photo of presents under a tree by Eugene Zhyvchik on UnsplashCreate a savings account and set up automated transfers from your checking into the savings account each week. Even better, if it is offered set up a Christmas Club account. Not many banks offer this anymore, but a large number of Credit Unions still do (and they usually pay a little bit more in interest). The concept behind these accounts is to save a little each week, but you can’t make a withdrawal until around November 1. While these may not be available under this name, socking some funds away regularly will provide a nice amount to use at the end of the year for your holiday shopping. This also reduces the temptation to just buy on credit

Figure Out A Budget

Set up a budget (use last year’s holiday spending as a starting point) and a priority (point) system for each person on your list. Give each individual a 5 to 1 number (spouse = 5, postman/trash/tips perhaps get a 1). Take your budget and divide by the total number of points to come up with a dollar value for each point. Now multiply out to figure out how much max to spend on each individual. Complicated? Not really, see below.

Say all the people’s points add up to 10 and your budget is $500 total. Then each point becomes $50, so you can spend up to 5 x $50 = $250 on the 5-point person and $50 for the 1-point person. This system has the added advantage that you are challenged to see how much gift you can get for their budget amount!

Use The Envelope Method

Use envelopes to track spending. Every time a gift is purchased, mark the running total on the outside of the envelope and put the receipt inside. As you purchase, you’ll know immediately how much you’ve already spent and hold off if you get to your limit. Use the above point system if you are afraid you might run out of money before you run out of gifts for people.

Don’t Just Buy During The Holiday Season

Another way to make the holiday gift-giving dollars stretch further is to make up your list of ideas early and watch for sales throughout the year to purchase. (Wrap them and label right away so snooping eyes won’t see them too early.) This allows you to find the best deals on those items and by December all or most of your holiday shopping is already done!

Don’t Forget The Other Holiday Costs Besides Gifts

When you are thinking about your budget, don’t just think about the costs for gifts. Other seasonal expenses include cards & postage for Christmas cards, shipping costs if shipping gifts to others, travel expenses if you go to visit family and holiday ornaments or decorations (hint: buy these after Christmas for the following year!)

The holiday season doesn’t have to be stressful particularly with some planning ahead of time.

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