11 Simple and Easy Tips for Starting a Successful Christmas Fund
- Rebekah Gamble
- Oct 7, 2020
- 6 min read
Updated: Aug 22, 2021
Taking the stress out of holiday shopping with a Christmas fund is the best way to celebrate! 11 simple and easy ways to take control of the holiday season and decrease financial anxiety will make holiday shopping fun and exciting instead of financially exhausting.
Christmas is fast approaching and while there are other holidays in between, Christmas is usually the one that leaves our wallets gasping for air. We wait until the last second to start shopping because we want to use a specific paycheck and then stress and anxiety kicks in because we start to second guess what we bought. While the meaning of Christmas is so much more than simply buying material items and shouldn't have long lasting financial effects, it often does.
It is the day that prompts us to make jokes like "I'm still broke from last Christmas" and while said with humor, it is very much a reality. One Christmas season, I had one fund that was an accumulation of random $20's, $50's and coins and this was all I had to my name.
If I was backed up on bills, needed spending money, or was loaning money to someone else, everything was out of this one area. So when I did my shopping and spent between $500 - $1000 on gifts my emergency fund/ sinking funds/ Christmas fund was empty.
I began the new year with zero dollars in my savings and no idea how to budget.
Keep reading to find out how to begin your own Christmas savings with just a few weeks left until holiday season while answering 11 frequently asked questions about the holiday season.
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What is a Christmas fund?
A Christmas fund is money specifically set aside for the holidays. This means that once it's gone your shopping should be done and your other methods of saving or income would remain untouched.
For families that have a reliable steady income, having a Christmas fund may not be at the top of the list, but it is still beneficial. It's less stressful to save $50 every two weeks for Christmas shopping than it is to spend most of two checks and become backed up on bills.
For those who do not make as much money or have a reliable stream of income, stress and worry has become a part of holiday season. For many it's normal to sacrifice and not accumulate debt around holiday time. Having a sinking fund for Christmas can be life changing for your health.
Stress is known to manifest in fatigue, acne, headaches, lack of appetite and even overeating.
If you begin your Christmas fund with the first check in January you may have more money to spend on gifts than usual. Or you can set your goal and once you hit it, keep putting money aside for another reason. Shifting financial goals allows your money plans to evolve as you grow.
How can I start a Christmas fund?
It's really simple to start.
What has worked for me is deducting $25 or $50 from my check. If there are 12 weeks left until December 19th you and you put $25 away a week you can save $300.
Keep in mind I am living off of a part-time income so if you make more money, look at your expenses and create your own savings amount. If you need help starting a budget then look into the 50/30/20 budget or the the simple "no-budget-budget"
For the no budget budget you would simply automate your typical savings amount, add up your expenses ( bills, child care, food, subscriptions, transportation) and subtract it from all sources of income you get per pay period.
From this amount you can decide what else you can afford to put aside strictly for Christmas. You can even take the original automated amount and use it as your Christmas fund. It all depends on your lifestyle and what you can comfortably do. If you find that there is any left over money once your bills are paid you may want to consider looking into side hustles or decreasing your expenses.
Consider adjusting how much you spend weekly
What would planning ahead for the holidays look like?
Ask yourself a few questions
How many people can you realistically buy a gift for?
What stores do you have access too?
Do you know what they want already?
Can you begin buying items now as different sales hit?
[Key word = realistic] You may want to get your partner, best friends family, the nice lady from church, and your neighbor from down stairs a gift.
Pick a store
Once you know the who, what, when, where, and why of shopping you can pick stores. Some shops will have great prices, but only if you go early.
Buying gifts people don't want can cause you to buy more things to compensate. Gift shopping is a time to become creative and think ahead. You don't have to buy the most expensive gift for it to be impactful.
Meaning within your small affordable gifts beats a large overpriced item any time.
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How much should I spend during Christmas on each person?
Now that you have counted the total amount of people, you can divide it by the amount you have or the goal you know you can hit.
Example:
I have to buy a gift for 10 people and I have $500 saved, this means my budget for each person is $50.
What if I spent over my budget?
Overspending during your Christmas budget happens. You can either deduct money from another persons gift, or see what is left to spend, how many people you still have to buy for, and do the math again.
The point of a Christmas fund is to spend the money you put aside specifically for the holidays. Try not to alter this amount if it means you are using a credit card that you can't pay off in full.
Should I shop online or in person?
You should have patience and do both. Shop online if you know what you are looking for.
Last year I only shopped online because I had a packed schedule and no time to spend walking up and down a mall. It backfired, because I had no idea what to buy and aimlessly purchased items I thought they would like.
But if you are purchasing an online only sale item for something you would likely buy in person, go for it.
Amazon tends to have nice lego sets and considering that a toy store will likely hijack the prices, I always shop online.
When it comes to clothes and shoes I am not a good online shopper but this method works great for those who know their sizes. You get to buy clothes that aren't likely to be seen in stores near you.
Should I wait for Black Friday?
Yes, if you can confirm that it will be cheaper around this time. The good news is that every year someone writes an article or makes a video about sale scams you should avoid.
Stores like NIKE will have great discounts on sneakers and sweaters. There are some family members that will only ever ask for a pair of Jordans, or a NIKE sweater, or $20 socks that go too far up their legs.
Or if you were considering buying a new TV or other technology searching stores like Best Buy would be ideal.
For those family members you can consider Black Friday shopping.
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Should I use credit cards?
If you have a card with a zero balance this would be a great time to use it. You can stay on budget, and in a few days when the balance is posted on your account, simply pay the bill in full.
Not only will this reflect positively on your credit score but you already had the money stashed away so you don't have to worry about a bill following you into the new year.
What if someone spends more on me?
Be honest with yourself, as you encounter those who are doing Yankee Doodle, Secret Santa, or preparing to buy you something, and ask the other individual(s) to set a budget.
It's easy to get caught up in the idea of first Christmas's with your significant other, or trying to outdo the gift from last year but you should not try to live outside your means.
Buy gifts with someone
Another alternative is to coordinate with another family member and buy gifts together. If you both had $50 to spend, together you can buy a $100 gift.
In conclusion
The holidays do not have to be a time where you're reminded of how much you don't have. Instead you can plan ahead as much as your circumstances allow, and feel proud of your efforts.
Remember, the holidays are always about the people you're with, not what is bought.
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