December 11, 2014

What Are You $aving for? (Part 1)
Does this sound familiar? A year ago you promised yourself that it wouldn’t happen again next year. The year before that, same promise. But again this year, December rolled around and you found yourself financially unprepared for Christmas expenses. Food, gifts, travel, events – all conspired to turn your good intentions into mere memories. Once again, you’ve turned to credit cards to bail you out.

Since there’s every likelihood that Christmas will come again next year, perhaps this is the year to finally put a plan in place to stay away from the crisis spending that so often characterizes the season. Our good intentions aren’t enough to make Christmas 2015 financially different from 2014 or 2013. We need a plan, and now is the time to create it, while this Christmas season is still fresh in our minds. Here are a few tips to help you get on track for 2015.

Start with information. What did you spend on Christmas this year? Consider:

  • What gifts did you buy, for whom, and how much did they cost? Did you have any shipping costs for some of the gifts?
  • What did you spend on Christmas cards – both purchasing and mailing?
  • What Christmas events (concerts, plays, etc.) did you attend and how much did they cost?
  • Did you do any entertaining this year? What cost was associated with that?
  • How about travel? Did you visit relatives or friends? What did you spend on travel, food, lodging, etc.?
  • Other than travel and entertaining, did you buy special food for the season?
  • What did you spend on decorations?

As you can see, the costs can really add up!! There’s nothing wrong with celebrating the holidays, as long as we’re prepared for the financial reality of how we celebrate. Once you’ve taken careful stock of this year, think about next year. Will you be doing everything the same or will something be different? Will you be buying gifts for the same people? Traveling the same places? Attending the same events and doing the same entertainment? Try to project as closely as you can how much you would be increasing or decreasing in each of these areas, to give you an idea of how much you will need to save. When you’ve done that, ask yourself one last question: Were there any surprise expenses this Christmas that you didn’t plan for? Do you need to plan a “surprise” or two into next Christmas?

Once you know how much you plan to spend on Christmas in 2015, set up a plan to save that amount prior to the time you will begin spending it. There are a couple of major ways to save for Christmas:

  1. Make it part of your monthly budget, like other items.
  2. Use “windfall” money from a tax refund or bonus at work to set up your Christmas fund. This one may be more appropriate in some cases, because it matches one-time income with “one-time” expenses.

Whichever way you go, consider putting this money aside in a savings account or some other vehicle to keep you from dipping into it over the course of the year.

Imagine the freedom you’ll feel next year when you begin your Christmas shopping knowing that you have set aside sufficient funds to allow you to leave your credit cards at home! Imagine the peace that will come after the Christmas season, when you’re not pressured to figure out how to pay off credit card purchases in addition to meeting all your other budget commitments. Then, prayerfully put a plan in motion to make it happen.