Did you know that Christmas will cost the average American $700, according to the National Retail Federation? That figure really got me thinking: If 76% of Americans live paycheck to paycheck (CNN Money), then December could be a serious problem.
Photo Credit: rickrmg (MorgueFile)
That is unless we change things. I’m not saying don’t spend a stack of Benjamins on Christmas, if that’s what you want to do. Does $700 sound like a lot to me? Honestly, yes. But then again, who hasn’t overspent at Christmas?
I just want you to realize you can do Christmas without hemorrhaging your bank account OR going into debt. Here’s one way that has worked for my husband and me.
How We Save For Christmas
Back when I became a bank teller, I learned about Christmas Club accounts. I opened one when I was 20 years old and never had to worry about Christmas again.
A Christmas club account is a savings account that routinely pulls money from your primary checking account. You can set up the amount and the frequency. Forced piggy bank. For example, $20 out of checking into savings every two weeks = $520. All year long, I saved for Christmas without lifting a finger.
When October arrives, my Christmas club automatically deposits its funds back into checking, so I can start the Christmas shopping early (which I never do).
Does it really make a difference?
The biggest impact saving ahead has had on us is the increased ability to give. I used to feel ashamed that I “couldn’t afford” to give more to loved ones or charities like Operation Christmas Child, Salvation Army and Angel Tree and now we can. That erases so much stress and guilt from the season of giving.
[Tweet “It truly is “more blessed to give than to receive.” – Acts 20:35”]
My Challenge to You:
Do you wish you could “afford” Christmas this year, avoid holiday debt, or donate more?
Step #1: Reduce your spending. A $500 Christmas can look a whole lot like a $700 Christmas. A $300 Christmas can look a lot like a $500 Christmas. What will mean more to your children? That they received loads of presents or that their parents are working together toward more peace and joy in their home?
Step #2: Start saving now. You don’t even have to open the “Christmas Club” account. You can simply set up an automatic transfer from your checking to a savings account (that you won’t touch!) on a regular cycle. Ask your teller for help. If they don’t know how, they’ll know who does.
For example, starting now:
- For Christmas 2015 – If you save $50 per week until Christmas = $500
- For Christmas 2016 – If you save $25 per two weeks until October = $650
Did the idea that the average American will spend $700 on Christmas surprise you? How much did your parents spend on holidays when you were young?
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5 thoughts on “How We Save For a Debt-Free Christmas”
Ahh! A friend of mine just suggested to me last night that I should try “an envelope” for gifts – of all kinds, including birthdays and Christmas – so that I can better manage my discretionary fund. Your post gives the same advice. Hmmm… Maybe that means I should do it : )
Yes, that’s a great idea, Ruth! I’m still not great at the other holidays. I think it’s largely because we don’t always remember them until the money is already budgeted (or spent) elsewhere. Perhaps dropping a set dollar amount into an envelope every pay period would do the trick. I don’t know, what do you think?
Yes, we run into the same problem. So dropping money into an envelope – or an account specifically reserved for gifts – would go a long way to making it all work. I’ll let you know how it goes for me : )
Small amounts definitely add up. We put $2.50 into a washer/dryer fund each time we do a load of laundry. We currently have over $450 in there. Let’s just hope those two suckers last a few more years!
I love that idea, Abigail! It’s a great way to make it happen without gouging savings.