Christmas is Coming

We are already only 15 weeks away from Christmas. Can you believe it? For most people, this means that you have 7 paychecks between now and then.

Have you begun saving for Christmas gifts yet? If not, it’s definitely time to start!

First, add up all of the people you will want to buy gifts for. This list might include members of your extended family, friends, co-workers, or even your boss if you feel so inclined. Once you have your list of people written down, decide how much you want to spend on a gift for each person. I’m not here to judge who you are and aren’t buying presents for, and how much you’re spending on each person, I’m here to make sure that your budget is ready for it!

Add up the amounts for all of the gifts and all of the people. Then, divide that by the number of paychecks you have between now and Christmas. If you want to finish your shopping early, subtract one paycheck. For example: If you get paid every 2 weeks and don’t mind last minute shopping, that means that you have 7 paychecks between now and then. If you want to finish early, make it 6. If you calculated that you want to spend $300 on Christmas gifts, that means that you need to save at least $43/paycheck (300/7) to finish last minute, or $50/paycheck (300/6) if you want to finish early.

Is that doable for you? If so, great! Start moving money every paycheck into your gift savings account. When it’s time to purchase gifts, stick to your budget, and transfer the money from your gift savings account back into checking, and you’ll be good to go!

If the amount that you come up with is too much to save per paycheck, you have two options. Either cut back on some other expenses, temporarily, to reach these goals (entertainment expenses are the easiest to cut, and groceries are the second easiest), reduce the total amount you want to spend on gifts, or some combination of the two.

I’ll make posts in the coming weeks about how to reduce those expenses, so be on the lookout!

To reduce the total amount you want to spend on gifts, go back to the drawing board and decide whose gift budget you could decrease, or even eliminate. Then do the math again on how much you have to save per paycheck (total gift budget divided by paychecks until Christmas) until you reach a number that works for you. When you decide on a plan, start moving that amount every paycheck into your gift savings account, and you’ll be good to go!

The difficult part of this, as with everything around money, are our emotions. How will Uncle Adam feel if he doesn’t get a gift this year? How will Grandma feel if her gift this year is less expensive than it was last year? Ask yourself this question instead: how would your loved ones feel if they knew that their gifts were putting you into debt? Would they still want them?

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If you make the decision to cut back on your list of who you’ll be giving gifts to, and you know that the people who didn’t make the cut are likely planning on giving you a gift, you might want to have a conversation with them about it. Tell Uncle Adam that you’re working on your financial goals, it’s not in your budget to get a gift for him this year, and you’re OK if he doesn’t get one for you either. He will either be happy to be released of the obligation (gift giving can be so stressful!), or he will choose to give you a gift anyway, and you’ll know that he did it out of generosity of spirit, not obligation, and you can say thank you.

As for Grandma who will be getting a less expensive gift this year than last, she likely won’t even notice. If she does, that says more about Grandma than it does about you.

All of this assumes that you don’t have any family members with birthdays in between now and then. If you’re like me and you do (ALL of my immediate family have birthdays in the fall!), be sure to include birthday gifts in this spending plan, if they’re not being taken care of already.

Do you want some help making a plan for saving and spending for the holiday season? Schedule a Q&A call to learn about how financial coaching can help you!

Have you started saving for holiday gift giving? Have you had to make any short term lifestyle changes to make it happen? Let me know in the comments!