It’s now the beginning of January, which means that for many people the Christmas bills will soon start to arrive. Oftentimes, it’s a stressful time – worrying about how to pay the bills, and if only the monthly minimum is paid on the credit card, you may still be paying for last Christmas at next Christmastime.
Or, you could save all year for Christmas gifts and have a cash-only Christmas (or at least pay all the credit card bills with zero stress, because you already had the money in your savings account when you made the charge).
In my family, we treat birthdays and Christmas like it’s a monthly expense. In a spreadsheet each year, I calculate how much money that we plan to spend for the entire year on birthdays and Christmas and then I divide it by 12 and have that amount moved into my savings account automatically each month. When I purchase a gift, I make a transfer back into my checking account to pay for the gift (I usually do a transfer back to checking around the 15th and 30th of each month, since I’m only allowed 2 transfers per month).
I want to make sure that I include everything in my budget, since often the “little” things can really add up fast. Some of the items that I account for in my spreadsheet include:
- Determine the number of people I will be purchasing gifts for (both Christmas and birthdays) and multiply by the budgeted amount per person. I usually spend $15 per child (since we have 8 nieces and nephews for both birthday and Christmas presents). We will spend more on our parents and we’ve agreed as a family not to purchase for adult siblings. We also spend a higher budgeted amount for our immediate family (like hubby, myself, and my 2 boys). I usually am under budget on the boys’ gifts, since they receive so much from other family members too.
- Budget an amount for Mother’s and Father’s Day both for our parents and for gifts to each other…from the kids of course
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- For Christmas, I budget an amount for helpers gifts (like teachers, tips for hairdressers, etc) as well as for stocking stuffers. I always think that stocking stuffers are little things…but it can quickly add up to about $20 a stocking. I want to make sure that $80 is budgeted.
- If you send out Christmas cards, I budget an amount to print out the picture card, letter and stamps to mail them out.
- Now that my kids are getting older, they’re beginning to be invited to friend’s birthday parties. You need to budget those gifts, too. I try to purchase those presents (and other family gifts) during clearance sales. I pick generic gifts that my kids would enjoy and save them for a birthday party invite.
What ideas work for you to pay for Christmas and birthday gifts each year? For other frugal ideas, head over to BeingFrugal.
Photo courtesy of sh0dan at stock.xchng.
Corrie is a "cents"able wife and stay-at-home mom of 2 boys.
{ 3 comments… read them below or add one }
We too have a special savings account for gifts – we also have a christmas club account through the credit union. It is nice because you cannot touch it at any cost until it pays out in November (good thing too because I think I would try to dip during vacations or birthdays for dd!)
Great tips! We try and be very careful to spread our budget out throughout the year, but this year we did some at the last minute.
It is awesome to not have to worry about the bills come January!
This year I am going to try a new approach to shopping for Christmas gifts. When I buy a birthday gift for someone, I am also going to buy their Christmas gift. This will help me spend less because I will be buying 2 gifts at once. This will help me get my Christmas shopping done early, too.
I loved your tips!