8 Critical Tips to Create Your Christmas Savings Plan

There are plenty of reasons to enjoy the holiday season of Christmas – the music, the lights, the spirit of giving, hot cocoa with mini marshmallows, ginger bread cookies… need I go on? But, nobody enjoys footing the bill. Christmas should be time spent relaxed with family and people you care about. It’s a lot more challenging to do the relaxed part when you’re worried about the debt you have from buying presents you can’t afford. Learn how to shop smart and save well, so you can enjoy the holiday season.

Red Poinsettia, One Green Leaf1. Get Your Naughty and Nice List Set in Stone

Look, not everyone you’ve ever laid eyes on in your life deserves a gift from you during the holidays. Write down your immediate family. Write down extended family you see more than three times per year. Write down the first three friends that come to mind. You can be a little flexible with these rules, but this should give you an idea of what your list should look like.

Cut out the relationships too confusing to explain to someone else. That means your sister’s husband’s nephew’s uncle will be getting one less gift this year, and that’s okay. Between my wife and I, we have dozens of aunts, uncles, cousins and 2nd cousins that we could try to justify giving gifts to every year. My wife and I decided early on to limit our gift-giving to those that really matter to us. Obviously your friends or family are important, but it’s natural that some are more meaningful to you than others. Don’t feel guilty about thinning the list to improve the quality of gifts you give to the ones you really care about.

2. Set a Gift Budget

You can set individual limits if you want, but you should absolutely be setting an overall budget. How can you plan to save if you don’t know how much you need? Once you’ve figured out who you’ll be gifting to, figure out how much you can afford to spend on them. A gift isn’t worth giving if you can’t afford it.

3. Create a Dedicated Holiday Savings Account

If you have trouble keeping money earmarked for the holidays, open up a holiday savings account. That way, you’ll never spend money that was intended for something other than giving. Also, it makes it extremely easy to track what you spend at Christmas, which can help you plan better for the next year! Opening a savings account is super easy – many banks allow you to open one online for free!

4. Shop Prices, Not Items

Girl Holding Christmas Gift

My wife is forever a planner. If I ask her what she’s thinking about at any given moment, she’ll be thinking about how our son will do when we’ve passed away (we’re young, and he’s not even in first grade!), or she’ll be thinking about how she’d like to design the floor plan of a home, should we ever decide to build one.

This deep planning has its advantages, though. For the holidays, it allows us to figure out what we want to buy for everyone on our list early in the year and then shop around for the best possible price. By knowing what you want, you can spend the year scouring shops and sites for the best price, instead of the best item.

5. Take Advantage of Direct Deposit

One of the best things I ever did to plan for Christmas was to set up direct deposit through my work, siphoning off my monthly holiday savings before it ever got into our monthly budget. When you don’t ever see the money in your budget, you don’t miss it. This also coincides with the Manage Your Means recommendation of paying yourself first. This allows you to ensure that your holiday festivities fund will be ready to go when you are.

6. Handle Large Groups Without Large Expense

If you work on a team or group setting, buying a gift for each member of that team will add up fast, and buying a generic cheap gift is a way of saying “you’re just like everybody else”. Suggest that the team instead have a White Elephant or Secret Santa, instead. This way, everyone can give and receive a quality gift, instead of twenty seven cheap gifts that end up in the garbage a week later.

7. Quality and Thoughtfulness over Quantity

You don’t want to receive a thoughtless gift, and neither does your gift-recipient. Putting sincere thought into the gifts you give will make them lasting and memorable, and will often be cheaper than if you had gone to the store and grabbed a couple of staple items (chocolate, movie, gift card).

8. Create Your Own Gifts (Maybe)

Do It Yourself (DIY) has made a huge surge in popularity in recent years. Creating a unique gift crafted from your own hands says a lot more than an Amazon gift card, though honestly, I wouldn’t mind getting one of those too! It shows that the person was worth putting in the time, skill and effort involved. Some of the gifts my wife and I treasure most have been created from the hands of our friends and family members.

Watch your expenses though – while DIY projects can save you money, they can also add up quickly, especially if you don’t have most of the items lying around the house. Make sure you figure out how much it’ll cost to create your masterpiece before you dive head first into the world of paint, thread and glue.

If you need some inspiration, head over to Pinterest or Etsy to get those creative juices flowing! There’s more than enough in those two sites to find what you’re after.

Wrapping It Up (pun intended)

Blue Wrapped GiftChristmas shouldn’t be a burden. It should be a time to relax, veg out and enjoy the company of those close to you. If you’re using next year’s tax return to pay for last year’s Christmas, you’re doing it wrong. Follow my advice and see how easy it can be to save for the holidays. Remember, a gift isn’t worth giving if you can’t afford it.

If you’ve got another method to save for the winter holidays, share them in the comments!

– Sam


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