Saturday, October 4, 2008

How to save for Christmas all year long

It is amazing how many people will tell you they are not ready for Christmas, on the week of Christmas. Or even worse, on Christmas Eve! Often it's because they have just been so busy they haven't gotten everything done, but some times it's because they have to wait until they get that last pay day before Christmas in order to do their Christmas shopping. I know this is a reality, a lot of people are on tight budgets, especially with the economy being in a slump, but there a few tools that can help in most cases to avoid the last minute madness.

Christmas club accounts. A few years ago I signed up for a Christmas club account at my credit union. Each month $150 a month is transferred from my checking account into my Christmas club account. On the 1st of November, that money is released to me in plenty of time for me to do my Christmas shopping, pay for travel expenses, or whatever I need to do. The beauty of it is that I have $1800 already allocated for Christmas, and I can choose to spend as much of it as I please, without guilt. I usually don't spend the whole amount on Christmas (one year I spent it on much needed car repairs) but it's nice to know it's there and I don't have to stress about it. Some people don't like the Christmas club accounts because they earn very little (if any) return on the money. But it is not designed for that, it is money to be there when you need it, and it is a very good way to force you to put some money aside.

Dollar a day. If you save just a dollar a day from Christmas day to November 1st, you will have a little over $300 dollars. Most people can squeeze this small amount from somewhere in their budget. I know I spend that much on unnecessary junk food that I don't need anyway. If you bump that amount up to $2 a day, and you have $600. Put it in an envelope and don't spend it until after November 1st. You'll be surprised at how painless this can be.

Spend to save. Some times the best way to save is to spend, at the right time. Good deals come and go throughout the year. Think about who is on your gift list and keep this in mind when you catch a good percentage off sale. I caught a great 40% off of already marked down clearance items at Burlington Coat Factory, and found really nice blouses on sale for $4-$6 after all markdowns. These can make very nice gifts.

These are just a few things you can do to give yourself a head start on Christmas and take some of the stress out of the money aspect, at least.

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