Five Tips on How to Save Money on Christmas

Did you wait until mid-November to start Christmas shopping? Trust me, you were not alone! This time of year tends to be the most stressful for people due to having to buy gifts for so many people, but also trying to figure out how to afford those gifts too. However, do not worry. Here is how you can reduce holiday stress from a financial perspective:

1. First, you will need to calculate how much you spent on Christmas gifts the previous year.

We know that Christmas will come every year on the 25th of December. If you are not someone who looks at their budget weekly, monthly, quarterly, or yearly, here is a sign to start now. Obtain any receipts or bank statements you can find from the previous year. Calculate how much you spent on purchasing gifts during the holiday season. If you used cash on a purchase and you no longer have the receipt, estimate the cost. After you have calculated how much you spent, determine if this amount was reasonable for your budget.

2. Now it is time to make a financial plan.

Now that you know how much you want to allocate for your Christmas budget, it is time to determine how much money you will need to save out of your monthly income. For example, if you decide that you would like to spend a maximum of $1,000 on Christmas gifts, it may be reasonable to save $100 every month or $50 biweekly. This means that at the end of October, the 10th month of the year, you will have $1,000. When setting money aside throughout the year, it is often beneficial to set up an automatic transfer through your bank, so that when your paycheck is deposited, your $100 will be sent into a separate savings account.

3. You can shop for Christmas throughout the year.

As your Christmas fund grows, you can purchase gifts throughout the year, instead of just shopping during Black Friday. Buying early, will not only save you time, but you will also forego stress and the hassle of shopping with the crowds!

4. Stick to the budget!

While managing your Christmas fund, it may be helpful to decide how much money you would like to spend on each person’s gift. If you had a particular item in mind, you may have to wait for the item to go on sale, or even choose a different item. Remember, your goal is to save money!

5. You do not have to buy everyone a gift.

If your family of origin consists of a large number of people, it may be fun and financially beneficial to do a gift exchange. Gift exchanges will not only cut costs significantly, but they will also reduce stress because you will only have to purchase a gift for one person. Gift exchanges were traditionally initiated by drawing names out of a hat, however, there are numerous apps available right now on your cell phone that makes this process a lot simpler.

Christmas is a very special holiday; however, it is only one day. Enjoy the moments leading up to the holiday without the financial stress and hassle of shopping with the crowds.