Hopefully you’ve survived the holidays, reading about next year’s holiday season is probably the last thing you want to do. But the sooner you start saving for Christmas, the less you’ll have to save each month. The best way to save for Christmas is to start in January. Yes, January!
As your holiday credit card bills start to come due, it’s actually the perfect time to assess your holiday spending and use that information to make a holiday budget for next year. Plus, making a holiday budget now can help you avoid overspending during the holiday season and make things that much easier when November and December roll around. While it’s fresh in your mind, make a list of your recent holiday expenditures, including gifts, cards, wrapping paper, travel, charitable donations, decorations. Don’t forget about other hidden holiday expenses, like a new outfit and shipping costs. Then, add up how much you spent on each category and also calculate your total holiday expenses.
Did you know most Americans spent an average of $997.79 per person (Based on NRF’s annual consumer spending survey) on last years Christmas, which was down 5% from the following year of $1,007.24 per person.
Before you start making a holiday budget for next year, truly assess your recent holiday spending. Are you happy with how much you spent on decorations, or did you go a little too Clark Griswold? Did your gift-giving generosity put you in too much debt to start the new year? Be honest with yourself and think about how holiday spending fits into your overall financial goals.
If you’re happy with your recent holiday spending, making a holiday budget for next year will be a snap. Just take your total expenditures, divide that number by 12, and that will tell you how much money you need to save each month to be on target for next holiday season.
However, there might be more to it than that. Consider your upcoming life expenses to determine how much money you should set aside for the holidays. For example, if you’re budgeting for a wedding or plan to buy a home, maybe you’ll need to rein in your holiday spending a little more this year.
Once you have your holiday budget locked in, open a savings account dedicated to your goal. Set up automatic transfers from your checking account into your holiday savings account. That way, you can “set it and forget it,” while also earning interest, so you’ll be ready to rock come Black Friday.
Taking stock of your recent holiday spending and making a holiday budget and know spending falls into three major categories:
- gifts for family, friends and coworkers.
- Non-gift holiday purchases such as food, greeting cards and decoration.
- Travel, season donations.
Making a holiday budget will help ensure that come next holiday season, your bank account isn’t depleted and that you have a game plan before you go on that holiday shopping spree.