Smart Strategies to Save Money for Christmas

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Last Updated on August 25, 2023 by Erin

The excitement of the holiday season is upon us, but so are the expenses. This post will share several smart strategies to save money for Christmas this year.

save money for christmas spending
Photo by micheile henderson on Unsplash

I don’t know about you, but I absolutely love creating holiday magic for my kids. The problem is it can get quite expensive. I made the mistake of over-spending the first few years as a mom. Now, with a bit more time and wisdom, I’ve figured out some smart strategies to save money for Christmas AND create meaningful, magical memories for my family.

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The Importance of a Christmas Budget

I promise that you can absolutely enjoy your holidays without breaking the bank. If it feels impossible, get off social media. Stop looking at influencer accounts. I know a huge part of my initial spending struggle was looking at what other “cool moms” were doing for their kids.

Saving money in advance allows you to approach Christmas with confidence (and a clear conscience). Many people rack up credit card debt during the holidays, which can take months or even years to pay off.

Setting a holiday budget is essential, but sticking to it can be challenging. Saving money in advance helps ensure you have the funds to meet your budget and prevent overspending.

Beyond the holidays, saving money fosters financial security. It allows you to build an emergency fund and invest in your future, providing peace of mind for you and your family.

Stress-Free Holidays

When you’re not constantly worried about the cost of holiday expenses, you can truly immerse yourself in the festivities. You can savor the moments with loved ones and focus on the traditions that matter most to you.

Plus, you can start the new year without the burden of holiday-related debt!

Embrace the Spirit of the Holiday Season

Saving money for Christmas isn’t just about pinching pennies. It ensures that you can fully embrace the spirit of the season without worrying about the financial aftermath.

By following smart strategies for saving and budgeting, you can enjoy the holidays to the fullest while maintaining your financial well-being. Remember, the true essence of the holidays lies in the love, laughter, and moments shared with loved ones, not in the price tag attached to the celebration.

Setting a Holiday Budget

1. Review Your Financial Situation

There is no way to determine a budget if you are clueless as to your financial situation. And by financial situation I mean knowing all the ins and outs of your net worth, retirement, spending, etc… the whole enchilada.

The easiest way I have found to accomplish this, is by using an online program. I have been using Empower for several years (formerly known as Personal Capital). I was able to easily link all my accounts and see the big picture.

Not only is it easier than writing it all out, but all of your information is kept up to date. The best part? It’s FREE to use. It’s going to make it so much easier to save money for Christmas and get the ball rolling.

2. Estimate Your Spending

Make a comprehensive list of anticipated holiday expenses. This should include:

  • Gifts: Estimate how much you plan to spend on gifts for family, friends, and colleagues.
  • Decorations: Account for any new decorations for your home, including lights, ornaments, and a tree.
  • Travel: If you’ll be traveling during the holidays, factor in transportation, accommodation, and food expenses.
  • Food and Entertainment: Include the cost of special holiday meals, parties, and any entertainment expenses.
  • Charitable Giving: If you plan to make charitable donations during the holidays, include this in your budget.

3. Prioritize Your Expenses

Once you’ve listed all your potential expenses, prioritize them based on what is most important to you. For example, if giving meaningful gifts is your top priority, allocate a larger portion of your budget to gifts.

Is there anything you could cut out completely? Decorations would be the first thing to go on my list. Unless I find an incredible sale on something I’ve had my eye on for several years, it’s unnecessary.

4. Set a Total Christmas Budget Amount

Based on your income and financial health, determine the total amount you’re willing to spend during the holiday season. This is your maximum budget.

Break that amount into specific categories and adjust based on its priority.

Ensure that your budget is realistic and aligns with your financial capabilities. Don’t create a budget that you can’t realistically stick to.

5. Track Your Spending

Now that you’ve set the budget and its time to start shopping, make sure you are tracking everything and staying on track. You can keep an eye on your Empower dashboard, but you could also have a notepad or printable sheet to track throughout the weeks leading up to Christmas.

I don’t know about you, but every year I forget about gifts I have purchased until it was time to start wrapping.

6. Communicate Your Plan with Family and Friends

I’ve had to explain to family and friends that we were trying to stick to a budget. It feels uncomfortable but everyone understands…probably because most people struggle with overspending around the holidays.

Personal story time: My husband has a large family. For several years we were buying gifts for every adult and then our nieces and nephews that came along. We ended up having 9 nieces and nephews, and the gifting expectation was getting out of hand.

It was hard to break tradition, especially for members of our family that love gifting, but we were able to get creative. We still do a White Elephant exchange (with non-tacky gifts) with the adults, and each cousin draws a name to decide who they will get a gift for.

Create a Plan to Save Money for Christmas

Now that you have your budget set, it’s time to create a savings plan.

Creating a savings plan specifically for Christmas spending is a practical and effective way to ensure you have the funds you need without resorting to credit card debt or dipping into your regular savings.

Consider Opening a Dedicated Savings Account

If you want things to be extremely cut and dry, this could help. It would make it easier to track your progress and prevents you from accidentally spending the money on other things.

How do you save up enough to put into that account? Here are a few suggestions:

1. Mini Savings Challenges

If you’ve started your Christmas spending plan early, you can do a longer savings plan, but most of us think of it a little too late. Never fear! One of my favorite ways to save up for something is to do a mini savings challenge. It’s much easier to commit and stick to.

I have a whole post regarding mini savings challenges, as well as a free printable download to track everything.

Definitely give that post a read and pick one of the seven mini challenges to get you motivated and excited to save.

2. Automate Your Savings

Set up automatic transfers from your primary bank account to your Christmas savings account on your chosen schedule (monthly or weekly). Automation ensures you consistently save without having to think about it.

3. Cut Unnecessary Expenses

To boost your Christmas savings, review your monthly budget and identify areas where you can cut unnecessary expenses. Redirect the money you save into your holiday fund.

Use a service like BillTrim to lower your bills and find those pesky subscription services you’ve forgotten about.

4. Increase Your Income

Don’t scoff at this one, okay? I firmly believe in having multiple streams of income, even if it’s just to have funds for holidays and birthdays. You may not have enough time this year but start planning for next year.

With this blog I was able to start generating a small income in 6 months’ time. Blogging might not be your cup of tea but there are so many ways to generate income, some of which could be passive after a bit of initial set up.

Any additional income you make can go right into your Christmas savings account if you so desire.

Here are some posts you might be interested in:

8 Realistic Passive Income Ideas for Midlife Women
Monetizing Midlife Hobbies

5. Utilize Cash Back Rewards

This is one of my favorite strategies to save money for Christmas gifts.

I don’t just stop there, though. I use cash back rewards and earned gift cards for most of my non-essential purchases. If I have my eye on a new pair of shoes, I wait until I have enough saved up in rewards. It’s a game-changer.

There are a multitude of legit apps that exist to help you earn rewards throughout your day. I personally take surveys, download and play games, and search for rewards for items I was already planning on buying at the store.

Give these posts a look to get more information:

How to Make Easy Money on Your Phone
Make Money with Online Surveys in Your Spare Time

Discipline is Key

Regularly review your savings plan and your progress toward your goal. Adjust your contributions if necessary to stay on track.

It can be tempting but avoid using your Christmas savings for anything other than holiday-related expenses.

Stick to your budget and look for deals and discounts to maximize your savings.\

Mindful Gift Giving

I can’t take credit for this idea, because I’m pretty sure I saw it on Pinterest many years ago. Each child gets one big present from Santa and then from their parents they get:

  1. Something they want
  2. Something they need
  3. Something to wear
  4. Something to read

Following that plan has helped me reduce my spending dramatically and be much more thoughtful about what I am gifting. I’ve had to take a good hard look at the types of items I am purchasing. It’s so much better to invest in toys that stand the test of time, rather than flashy, trendy toys. Those are the ones that end up in the donation pile after a short time.

I’ve also decided that the gift they “want” doesn’t have to be a physical item. It can be a printed ticket to a wonderful, memory-making experience.

Post-Christmas Review

After the holidays, assess how well your savings plan worked.

Did you meet your goal?

Did you overspend in certain areas?

Use this information to refine your approach for the next holiday season.

Don’t stop saving after the holidays are over. Instead, continue contributing to your Christmas savings fund throughout the year so that you’ll have a head start for the following year.

Final Thoughts

Creating a Christmas savings plan not only helps you avoid financial stress during the holiday season but also promotes smart financial habits throughout the year. It allows you to enjoy the festivities with peace of mind, knowing that you’ve planned and saved responsibly.

Happy savings, friends!


smart strategies to save money for christmas

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