Wednesday, December 30, 2009
Saving for Christmas the Easy Way
Now that Christmas Day and the gift-giving melee is behind us I want to ask you a few questions....
1. Did you have a gift-giving budget?
2. Did you stick to that budget?
3. Did you pay cash for all the gifts you gave or did you put them on a credit card and spend money you do not have yet?
If you answered YES to All of those questions, Congratulations!! You are winning financially.
If you answered NO to Any of those questions, you really need to make some changes for your financial well-being, and you have some work to do before Christmas rolls around next year.
I know that it's way early but here is something you can do NOW to make sure that you avoid the Financial Hangover next January.
The Financial Hangover...you know....the sick feeling you get when the credit card bill with all those Christmas purchases on it arrives after the 1st of the year.
So as not to end up buying presents on credit next year, put money aside starting in January for next Christmas.
Sit down and figure a rough budget for gifts.
Say $500 would be a good amount to spend in relation to your income.
Divide that figure by 11.
Every month, for the next 11 months, put aside $45.45 into a Christmas fund.
You can set up an account at your local credit union or bank.
Or have the money automatically deposited from your paycheck into an online account like at ING.(This options is good if you don't trust yourself to save the money or you are forgetful.)
Or even just put the cash aside in a cookie jar in your house.
Even better, go set up a Christmas Club Account at your local bank. These type of accounts are making a comeback lately! If you are like most people, you will hardly notice the little amount missing from your monthly income.
Do this one thing, put aside a set amount of cash each month and don't touch it!, and come the beginning of December, you will have enough saved up to pay CASH for Christmas!
I find that if I am trying to save money for a goal, I am more motivated if I keep that lump of cash separate from my other money. If I am saving and mingle that money into an account with other money(just dumping it into my checking or general savings account for example), I am less motivated to keep going toward my goal. So I end up with lots of little piles of money in different accounts. Being able to visualize the money works for me.
So I am setting my Christmas budget now at $800. On the 1st of each month, starting on January 1st, I will move $72.72 into my Christmas Fund.
Come join me in this Savings Goal.
Figure out what your Christmas Budget should be. A general rule of thumb is that your Christmas spending should NOT exceed 1.5% of your total income. I just mention this as something to get you started on thinking about what your budget should be.
After you decide on a do-able Budget, post it in the comments section.
If there is enough interest, I can do up a chart of participants and post it on the sidebar.
Each month I'll post a reminder for everyone to Fund their Christmas Account.
Let's keep track of how we save for Christmas together.
The Sluggy Christmas Club! ;-)