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How to Keep Christmas from Breaking the Bank

How to Keep Christmas from Breaking the Bank

11/28/2014 11:55 pm0 comments

So it’s almost December.   Another year has past and once again Christmas is coming up on December 25th just like last year.   A lot of people are now trying to figure out how they will pay for Christmas gifts and events this year.  It seems like many of us are in this never ending cycle of spend now and pay later yet we seem to regret it when the bill comes due.  We put Christmas on a charge card and in January have a depressing time looking at the credit card bill and are often in disbelief at how much we spent yet many of us don’t change the cycle.  Why do we put ourselves through such stress?   Is it because we want to please others by always getting them that gift they really want or maybe we just have to have something right now and Christmas Gift Budgetingjust cannot wait a little bit until we have enough money.   Maybe we are just trying to keep up with having the latest and greatest of something.   Whatever the reason, a special time like Christmas can be much more enjoyable by not having to go through the by now pay later stress.   How you ask?

It’s really quite simple yet takes some discipline and patience.   All you need to do is setup a sinking fund.  Let me explain.  We all know Christmas comes on December 25th every year so starting in January simply set aside 1/12 of the money you will need in your Christmas budget in a short term savings account or even just put cash in an envelope and save it in a safe place in your house.    Each month set aside the same amount of money and by Christmas you will have saved all the money you need for Christmas.  For example, if you will budget $1500 for Christmas then each month set aside $125.   It’s always a good idea to pad your Christmas budget a little for those unknown gifts/expenses that come up, too.  Now when January comes around you won’t be dreading that credit card bill and be wondering how you will pay for it.

Sounds simple and common sense yet so many of us cannot seem to discipline ourselves to do it.   Well I challenge you to try it for just one year and see how you feel after Christmas and January comes around.   If you need to, find someone to keep you accountable each month for saving the money.  My wife and I have been doing this for quite a few years now and the Christmas budget is one thing we don’t argue about and it makes the holiday that much more enjoyable.   Oh, and here’s a tip for free. This works for other things too, such as car insurance that you pay once every six months, life insurance, birthdays, graduations,  furniture, basically anything that is a large enough purchase that you are not able to pay for it at the time without going into debt.

Feel free to post some stories about your Christmas budgeting.

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