December is indeed the most wonderful time of the year for many people. It’s Christmas. We celebrate Jesus’ birth. Spend time with family. Give gifts to those we love. There is much about the holidays that is wonderful.
But January too often… Well, not so wonderful when the bills from December start to arrive and we get that cold splash in the face of how much we actually spent while enjoying the holidays.
If this sounds familiar, there is not much we can do about this past Christmas other than work to pay off our bills as soon as possible. However, I want to make a prediction. I’m reasonably certain that next December 25th? It’s going to be Christmas again! So the best time to make sure next January is a little more wonderful is to start planning today.
When I was a child, I remember my mother going to the bank to set up a Christmas Club. She’d put in a little bit of money each month and then when Christmas came she had cash to spend on the things that were needed for Christmas. Many banks still offer Christmas Clubs, but you can accomplish the same thing with any type of savings account.
The key is to stop and think about ALL of the extra costs you have around the holidays. Now with the holidays (or at least January’s bills) somewhat still in mind, it’s a great time to think about this.
So what expenses do you need to be prepared for next December?
- Obviously gifts are the first and perhaps largest item. Consider who you are likely to buy gifts for and roughly how much you are likely to spend on each one. Clearly immediate family comes to mind, but don’t forget less obvious gifts like co-workers or bosses at work? Gifts for the kids’ teachers? Gift exchanges at the kids’ school? etc.
- How about travel expenses? Do you have family out-of-state that you will likely travel to visit? Gas? Airline tickets? Hotel?
- Food. Will you be hosting a large family get together? Do you need to plan for extra grocery money for this time?
- Along the same lines how about the holiday baking? All those Christmas cookies? Do you need to budget an amount for this?
- How about wrapping paper? Christmas decorations? The Christmas tree if you use a natural one?
- Special Christmas tips for folks like the newspaper delivery boy, your hair dresser? Others?
- Do you do any special giving during the holidays?
- Christmas cards or Christmas pictures?
- Any other special family traditions?
Think through these items and estimate about how much you are likely to spend on each item and then total it up.
Now just for the sake of argument let’s suppose that you expect to spend approximately $1,000 on Christmas and all its related items. We have about 10 month left until we get to Christmas again so if you save approximately $100 each month for the next 10 months then when next Christmas rolls around you will be able to pay cash with peace of mind for all the Christmas expenses. Christmas will truly be a wonderful time and best of all there will be no January surprises.