When is Christmas This Year?

 

This seems like a silly statement to make, right? This is something that I’ve heard Dave Ramsey say a lot on his radio show over the years. We all know that Christmas is on December 25 every year! However, many of us allow Christmas to creep up as if it is on some unpredictable, rotating schedule each year. We don’t plan for it because we fail to make a Christmas budget and don’t think about it at all during the year. Then we end up throwing away most of the progress we made all year in order to have presents to put under the tree.

That’s why it is so important to make a budget and to write a new budget each month to deal with each month’s unique issues. December and that whole season may call for its own separate “Christmas budget.” It is also important to think about other events that we know happen at certain times of the year so we can include those into our budget, especially if we need to save for it in advance. Here are some examples:

• Christmas is on December 25. (We already went over that!)
• The family reunion is in August.
• Mom’s birthday is in September.
• The car insurance premium payments are due in July and January.
• The apartment lease ends in November and it’s time to move, so there’s a new security deposit, fees, moving expenses, etc.
• Your daughter is getting married in November.
• You have been asked to be a groomsman for your college best friend’s wedding in October in another state.

So as you can see, the silly statement announcing Christmas as being on December 25 is more than about saving for Christmas. It is about viewing your financial life from a long-term perspective. There are going to be enough unpredictable things happening in our lives. Let’s do our best to make a plan for the things we already know are going to happen.

Since the Christmas holiday season is most likely the longest event away for many of us, let’s make a plan. It’s pretty easy. There are only two steps to creating a Christmas budget that will help keep the money stress away.

 

Step 1: Figure Out What a Typical Christmas Season is Like for You

 

Here are some questions you should ask yourself:

• Are you traveling or are people traveling to you? What’s the estimated cost of travel?
• How many people do you usually buy gifts for and how much are you willing to spend on each person?
• Are your gifts limited to family, or will you be buying gifts for close friends, parties (i.e. white elephant gift exchanges), etc.?
• What plans do you have to support any charities during the holidays?

Those are a few questions that will help you gather an idea of how money you will need to make it through the season without incurring any debt. Detailed answers are not necessary. It is just necessary to think about these things in advance so you can create your action plan.

 

Step 2: Make Your Christmas Budget and Start Saving

 

The next step is to figure out a savings plan to fund the Christmas budget. For many people, putting money away each month throughout the year is going to be the best way to save for Christmas. Saving $100 per month between June and December will yield you $700. Saving $50 per month will yield you $350. How much you decide to save depends on how much you plan to spend. Remember, this all depends on how much you plan to travel and how much you plan to spend on gifts. If you are a smaller gift type and all of your family lives in the same town, you won’t need to spend as much as someone who needs to travel 500 miles and wants to buy larger gifts.

Furthermore, you need not put every dime you plan to spend in December in a savings account. You just need to put away as much as you think will exceed whatever you’re able to provide out of your monthly budget. In 2013, I was able to fund my Thanksgiving and Christmas travel out of my normal monthly budgets, but after that, I did not have much left over for gifts. So, this year, I plan to save enough throughout the year to cover gift purchases.

 

Get Started!

 

So, whether you are planning for Christmas or planning for the many other things that happen throughout the year, it is important that you take account of those events before they arrive so that you don’t derail your goals. Hopefully, you will be able to take care of many of those items with your regular monthly budgets. However, bigger upcoming events may require you to put money away in a savings account each month. Planning is one of the best things we can all do to keep ourselves on track, so let’s get at it!

 

Question: Does Christmas (or birthdays, a quarterly or semiannual bill, anniversary, etc.) always seem to  creep up on you? What are you going to do to make sure that doesn’t happen this year?