Prepare For Christmas 2009 Right Now
Christmas? What? Didn’t that just pass a few days ago? Why should I worry about Christmas day now, especially a Christmas that’s almost a full year away?
I’m glad you asked. If you’re like a lot of people, you probably wanted to spend more money on Christmas gifts than what you actually had saved. If you’re like a lot of people you probably went ahead and paid for your gifts on a credit card with the intention of paying it off “soon.” Hopefully soon is next paycheck. Hopefully you don’t intend to keep paying for Christmas gifts over the next few months.
Whatever you plan to do with your credit card, next year we’re going to do Christmas different. Next year we are going to have enough money to pay for all of the gifts we buy for everyone. The key is to start saving now.
First things first - you are going to need a place to keep that money until next year. Preferably that someplace safe earns a decent interest rate, and is someplace you don’t look often, like your normal bank account.
An ING savings account is an ideal place to put that money. I don’t have any affiliation with ING, I just happen to use their savings and checking accounts and I have been very happy with their products and service so far. If you need help getting started with ING, I previously wrote about using ING sub-accounts.
Once you have your account opened and named ‘Christmas Account’ (for good measure, this isn’t really necessary), we can get started with the savings. You will need to figure out how much you spent this year on gifts. Make sure you factor in everything you spent, including wrapping materials, bags, and Christmas cards. Don’t forget about any gifts you bought for coworkers or other people who may slip out of your spending memory. We want to make sure we have an accurate number for next year.
Now divide that number by 24, and you will have the amount of money you need to save every paycheck for next year’s gift giving. This assumes you get paid twice a month. If you were paid every other week you would divide by 26.
Here’s an example. If you spent $500 this year on gifts, you would divide $500 by 24, which gives you about $21 a paycheck. Not too bad, right? And over the course of a year, you might earn a little bit of interest on the side, instead of paying interest on a credit card.
Every time you get paid, put the necessary amount of money into that account first thing. Don’t touch it for anything. Better yet, set up an automatic savings plan that will pull that money out of your account automatically so you don’t have to worry about it. Think of that payment as a bill that you need to pay. When December rolls around and you have enough money to buy everyone gifts without resorting to the credit card, you’ll be glad you did.
One More Idea
If you got stuff this year that was nice, but maybe isn’t stuff you want to keep, consider re-gifting it next year. Get a sticky note out, write down who gave you the gift in question, and put it away until next year.
When the time comes, pull it out, look at the sticky so you don’t give the gift back to the same person, and give it to someone you think will enjoy the gift. You’ve saved yourself from having more things around that you don’t need, you saved a small space in a landfill, and you are saving yourself some money.
