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How to Save for Christmas Early

Now that it’s December, we’re deep in the middle of the holiday season and as bankruptcy attorneys, we can’t help but think about the number of debtors who will be putting Christmas gifts on credit cards because they don’t have the extra cash laying around to afford a “nice Christmas.”

Christmas is weeks away, so we thought it was timely to talk about it. The reality is that a lot of people wait until December to start their holiday shopping. When they don’t have any money saved for Christmas, they panic and the first thing they do is turn to credit cards, which they end up paying off for months, sometimes until the next December. Not an ideal situation, especially when you factor in all that extra interest they’re paying.

What Are Your Spending Goals?

Since it’s already December, it’s probably too late to save for this Christmas, but as of December 26th, you can start saving for next Christmas. How much did you spend on Christmas gifts this past Christmas? Or, how much do you usually spend on Christmas? Was it $500 or $1,500? Often, the amount all has to do with the size of your family and your family’s gift-exchanging traditions.

Create a gift-giving ($) goal, start saving, and when Christmas rolls around, make sure you stick to it! Once you have come to a reasonable amount, divide it by the number of months that you have left until next Christmas. Once December arrives, your Christmas stash will be fully funded and you’ll be able to enjoy the holidays without resentment or feeling pinched for money.

If you wish to give to your favorite charities over the Christmas season, now is a good time to start thinking about which charities you want to help. Make sure those donations are included in your Christmas budget. If you later realize that you can’t afford to donate as much money as you’d like, that’s okay. Remember, volunteering your time can be just as valuable and sometimes charities need volunteers as much, if not more than money.

We recommend setting up a separate savings account and title it, “Christmas Savings.” This is a great way to transfer money over each month without getting it mixed up with other funds in your checking or savings accounts.

Next: Can Holiday Debt Be Included in Bankruptcy?

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