Prepare for Christmas… Now

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Yes, Christmas.

No, we’re not encouraging you to play “Deck the Halls” or unravel strings of colored lights. We are, however, encouraging you to start saving.

Christmas is 5 ½ months away, but it’s not too early to start saving. Planning your holiday spending in advance can take some of the stress out of Christmas, because you won’t be worried about the credit card bill you know is coming in January. It takes a little time, and a little more discipline, but planning ahead will pay off. And we’re going to help you do it.

You can start your planning in one of two ways:

  1. Set a budget, regardless of the types of gifts you hope or expect to buy, or
  2. Make a list of presents you already know you want to purchase and determine how much they will cost.

Set a Budget

Once you have a budget, figure out whether you have any of it saved already. If you’re in the habit of saving, you may already have enough set aside to cover your Christmas budget. If so, decide whether you want to spend all, some or none of the amount you have saved, so you know how much more you need. If you haven’t saved this year (and lots of people haven’t), then this step is easy.

Next, break your Christmas budget shortfall into increments. The increments will vary, and are best determined by your pay schedule. If you get paid every two weeks, divide the amount you need for Christmas equally among the pay periods you have left between now and the holidays. The same method will work if you’re paid every week, or once a month.

Make a List (and Check it Twice)

Now for the hard part. You may find, after breaking your savings down, that it’s simply not feasible for you to save enough to buy everything you want this Christmas. Be prepared to make some difficult decisions. You may have to buy presents for fewer people, or buy fewer – or less expensive – presents. You could also explore creative, alternative, gifting options.

Making adjustments to your list will be difficult, but stay focused on the big picture. This Christmas, you’ll be able to pay cash for everything and you won’t end the holiday season deeper in debt. These are good things! And remember, you’re starting late in the year. Next year, you can start saving on January 1st and have a lot more to spend on your loved ones come December.

Consider creating a separate savings account for your Christmas budget. That way you’ll be able to keep track of exactly how much you have and you’ll hopefully be less likely to spend it prematurely.

Check out Christmas Savings Plans

You may also want to look for stores that have Christmas savings plans of their own. If, for example, you have kids, look into the Toys ‘R’ Us Christmas savings program. The program helps you save and also gives you a 3 percent bonus if you sign up before October 16th. Sears has a similar program.

Though they’re not as prevalent as they used to be, some banks offer “Christmas Club” savings programs. The bank sets up a separate savings account for you, which you’re not allowed to access until the holidays. With this type of program, you have the added bonus of not being able to dip into the account and whittle away at your savings.

It’s hard to think about Christmas in July. Right now, the days are long and hot, and Christmas seems a long way off. But, it will be here before you know it, so don’t procrastinate. If you take the time now to financially prepare for it, you’ll have much more enjoyable holiday season.

Improve your financial health in other ways by going to /a>, where you’ll find great tools like a free credit score, budget planner and home loan recommendations. And check out these other great money-saving articles:

  • Money-Saving Tips for Pet Lovers
  • How to Improve Your Credit Score in 5 Simple Steps
  • 6 Tips for Budget-Friendly Shopping at Yard Sales
  • To Buy… or Not to Buy in Bulk
  • How to Keep Your Home Clean and Green on a Budget

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