You can breathe a sigh of relief, Christmas is over.
Your living room has been cleared of the wrapping paper ocean that occupied it Christmas morning, those new toys, clothes, and books have long been put away, and unless you’re a crazy Christmas person like me, your tree has been packed up, waiting for next year.
The kids are back in school, you’re back at work, and you’ve already made your New Year’s resolutions.
But before you relax back into the rat race, don’t forget to think about Christmas 2016. Whether you way overdid it, stuck to your budget, or landed somewhere in between, if you want this year’s Christmas to be even better than the last, you need to start saving for Christmas right now.
It’s time to take stock, analyze your spending, and create a plan to sock money away in savings so that when the shopping frenzy hits, you’re prepared.
First, decide how much you need to save for Christmas.
If you use Personal Capital (it’s free) this number is crazy easy to find. Personal Capital is like Mint.com, only easier to use, and gives you way better information. Personal Capital allows you to aggregate your financial accounts so that you can easily see your entire financial situation. You can connect accounts like your mortgage, bank account, credit cards, investment & retirement accounts, and more. Even better, Personal Capital is FREE.
If you don’t yet use a service like Personal Capital, I highly suggest you check it out.
Otherwise, you’ll need to go through your bank accounts and credit cards and find out how much you spent on Christmas 2015. Yes, this can take a little bit of time, but trust me, when Christmas is already paid for by the time it rolls around, you’ll be thanking yourself.
No matter whether you feel like your overspend, under spent, or landed somewhere in between, you need to save more for Christmas than you spent last year. I’m not encouraging you to SPEND more on Christmas 2017, but I am encouraging you to plan for the worst: kids asking for increasingly expensive presents, college funds that need to grow bigger, etc. Shoot to save 10% more than you spend last year, and if total Christmas spending ends up coming in much lower, then pat yourself on the back and invest the difference.
Next, decide what account you’re going to use to collect the Christmas Fund
To keep everything from getting hinky with all of the different goals you’re saving for, open a completely separate account for the Christmas Fund. This doesn’t have to be a different bank, just a different account, like a savings account from Capital One 360. Capital One 360 is an online-only bank that offers fee-free checking and savings accounts with competitive interest rates. You can open up to 26 separate goal-nicknamed savings accounts to make sure that each and every goal has to place for its savings to sit.
Or, if you prefer to earn a little more from your Christmas savings fund, check out Betterment. You can set up tons of different investement accounts, choose your risk preference, name them according to the goal you are saving for, and even set monthly auto deposit or goal-deposit amounts. Betterment will let you know whether you’re on or off-track to reach your goals, and as a bonus you may be able to earn a better rate of return than a savings account.
Third, find ways to cut your budget. Then save the difference.
No expense, whether it’s monthly, yearly, pay as your go, or even contracted is non-negotiable. Everything you pay for can be negotiated down, and if the company you’re paying refuses to cooperate, you can always, always switch companies.
If you’re having trouble coming up with the amount you need to save monthly go through your budget with a fine-toothed comb, build it from the bottom up with a workbook like the Marriage & Money Book + Workbook, and leave no stone un-turned when it comes to your hard-earned money coming out of your bank account.
If that’s not enough, find ways to make extra money that work for your schedule.
Sometimes, even cutting expenses isn’t enough to hit your savings goals. Heck, sometimes cutting expenses isn’t even enough to make ends meet. I’ve been there, and so have so many other people, and if you’re currently there here is my best advice for you: Get a side hustle.
I don’t mean waiting tables at your local Applebees, I mean find work that fits in your schedule, that you can do from home according to any schedule you like, and that pays enough you feel like its worth doing. What works for you is highly specific to you, but you could do anything from searching with Swagbucks, redeeming cash back on groceries, taking survey, or any number of other methods to make extra money, and it doesn’t have to add up to a lot to make a difference. Even an extra $50 – $100 a month can make a huge difference when it comes to taking some of the financial stress away.
Even after all traces of Christmas are wiped from your house, don’t lose sight of the big picture. When you can do that, not only does the whole personal finance thing get easier, you let go of so much stress, you take back control, and you set yourself up for a lifetime of financial success.
Tell me your favorite way to save up for Christmas below in the comments! I would love to hear it!