Almost everyone spends some kind of money around the November and December holiday season. Even if you don’t celebrate Christmas, chances are you buy gifts for your boss or do a gift exchange at work or host holiday parties.
Most folks fail to plan throughout the year for this spending. Then they hit November 1st, panic and reach for the credit cards. Thus it’s crucial, if we’re talking about saving money, that we have a plan for holiday spending.
The key to holiday spending success
The key to holiday spending success is to start saving money for the holidays in January. But even if you didn’t start in January, get started now.
Decide (in conjunction with your spouse or partner if you have one) how much you plan to spend. Make sure to include holiday travel and food expenses.
Then assume you’ll want to start spending that beginning in November. Divide that total by the number of months you have to save (11 if you’re starting in January). Transfer that amount of money into a separate savings account each month.
Many banks and credit unions have what’s called a “Christmas Club”. This is a savings account for holiday spending and they typically transfer it back into your checking account November 1st.
As an example, say your family of 4 plans to spend $1,000, divide $1,000 by 11 and we see that you need to transfer $90.90 into your holiday savings account each month starting in January.
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