How We Save $1400 for Christmas – The Easy & Painless Way

Christmas can be an expensive holiday – there are parties, holiday events, Santa photos, and of course, gift giving. With two kiddos and only one income, hubby and I needed to figure out a way to save for the holidays. As many moms do, I took to Pinterest and while I was scrolling, I kept seeing a graphic similar to the one below that showed a way to save by increasing your weekly contribution to savings.

52 Weeks of Savings – Pinterest Method

Accrual calendar showing savings over the course of 52 weeks by increasing contribution by $1 each week

It is a clever idea and I like the concept, but it doesn’t make sense for a few reasons. As I already mentioned, the holidays are expensive. Who wants to be contributing $200 to a savings account in December??? From a logistics standpoint, it would make more sense to reverse the plan and make your largest contribution in your first week. That way your account would accrue more interest over the year. However, even doing it that way means setting aside $200 in January when you’re still recovering from Christmas spending – ouch!

The concept of that plan is great, but the execution is flawed. I went to work devising a way to make it work for our household in a way that was painless. Every year we set a spending budget for each family member, as well as friends, service providers, etc. We also like to pick a special holiday event every year to attend as a family, which means having some extra funds leftover. I took the total of both budgets – gift giving and the event – and divided it by 52 weeks. For us, that came to $27 a week, just a little over $100 a month. You can see how quickly it accrues in the graphic below.

52 Weeks of Savings – My Method

Accrual calendar showing savings over the course of 52 weeks by contributing the same amount each week

We then set up a savings account at our credit union (BECU*) specifically for Christmas and named it our Christmas Fund. Every week, BECU automatically transfers $27 to this account. It’s small enough that we hardly notice it and because the bank does all the work for us, it saves me time from having to go in and make the transfer myself. I highly recommend automating tasks where you can!

The Benefits

Saving this way means that we don’t feel the pain of a $200 savings contribution at the most expensive time of year. Instead, it spreads it out evenly in a way that we hardly notice. By saving throughout the year, we also don’t feel any added stress at Christmas (not financial stress anyway!). We have our Christmas spending already funded and it’s dedicated just to that. While it doesn’t accrue as much interest as it would if we made the largest contribution in January, it does provide more accrual than the first image (and let’s be honest, bank interest isn’t really that high anyway).

What’s nice about saving this way is that it allows you total flexibility with your budget. If you can only afford $40 a month, then contribute $10 a week. That’s still $480 that you would have at the end of the year for Christmas spending – that’s a pretty nice chunk of cash! Even if it doesn’t cover every holiday expense you have, it is $480 less that you have to worry about, and we could all use a little less stress at that time of year! It’s amazing how quickly money can add up when you set just a little aside every week. In fact, this same philosophy can be applied to anything you are saving for – college for your kids, a wedding, a vacation, etc!

To Recap:

  1. Make a list of all your estimated Christmas expenses – events and gifts
  2. Set a budget for each item on your list
  3. Divide that budget by 52 weeks
  4. If the amount is too high, adjust it to an amount that is doable for you
  5. Put a system in place for transferring that amount to a special savings account each week
  6. Sit back and relax while your Christmas savings accrues!

What other methods do you use for saving? And are there other tips and tricks you use to save money at the holidays? Let me know in the comments below!

*BECU is offering a promotion for new customers through 12/31/18. If you sign up using my referral code, we will both get a $100 deposit into our savings accounts – that’s $100 free money just for signing up! Plus, if you then refer BECU to your friends, you can earn another $100 for each person who opens an account, up to $500. You can see the official details at their page here. (Promo Code: 100REF18, Referral Code: 993877)

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