If your post-holiday credit limit is stretched as tightly as Santa’s waistband on December 26th, then today’s post will probably be about as popular as a lump of coal. But read up! By this time, next year, you could be a happy, Christmas-debt-free budgeter!
January, the First Month of Christmas
So, look. I know this is obnoxious, like when stores put up Christmas decorations before Halloween. Or the whole ‘Christmas in July’ thing. Ugh! I like my holidays to stay in their own lane—to sparkle on the date that they were intended, thank you very much.
But that sparkle? Well, anyone who’s watched a claymation holiday movie knows that it takes a legion of elves (and a payday or two!) to pull off all of the magic. So get started, now, by answering a few questions:
- How much did you spend on Christmas 2017? Include gifts, decorations and festivities. Tally it up the best you can, while it’s still relatively fresh in your memory. Consult your budget, your December bank statement, and last month’s calendar.
- Consider any changes for Christmas 2018—maybe the guest list will grow?—and adjust your figure. Best-guessing is allowed, as are margins of error. Now, what’s that number?
- Divide your number by eleven (or twelve, if you can squeeze in a ‘Christmas’ category payment before January ends). Got it?
That’s your monthly deposit to the North Pole. If it’s too steep, consider the big picture. Where can you cut a few red and green corners? (For one YNABer’s budget-friendly holiday tradition, see Tip #8 in this blog post.) Now set up a YNAB goal.
But What If You Haven’t Even
Paid off Last Christmas, Yet?
If you’re still wrangling with Christmas Debt, the 2017 edition, you’re in good company. And twelve months of payments towards next Christmas may seem ridiculous. It feels logical to pay off the debt you have before you plan for the next celebration, right?
Sorry, sugarplum, that’s not the best budgeting strategy. Even if you’re buried under six feet of financial snow (read: debt), you still need to plan for your true expenses! See YNAB’s Rule Two.
Essentially, if you’re not setting aside money for expected purchases, you’ll have a really hard time giving yourself the ultimate gift: freedom from debt! Saving (in this case, for anticipated holiday festivities) is part of a smart debt-repayment strategy. Of course, you could trim your spending, along with your tree, until you are debt-free. True priorities need some love, too.
Get on the ‘Nice’ List
Just like with advent calendars, little by little, you’ll (yule?) save your dollars over the next eleven months. And you’ll be so happy you did, because …
Small Seeds Grow Ten-Foot (Christmas) Trees
It may not go perfectly. Some months you might not have enough to meet your monthly funding goal for Christmas. Other times, you’ll have a little extra to toss into the Christmas kitty. But every dollar adds up. So don’t be a Grinch, and make sure to set those dollars aside.
When December comes, wouldn’t you rather have some money saved, rather than none? Thought so.
Guilt-Free Christmas Goodness
While budgeting can’t erase the calories from eggnog or sugar cookies, it can make other holiday traditions—like travel, shopping for gifts, entertaining, sparkly decor and, yes, even Christmas jammies—100 percent guilt-free! Plan wisely, starting now, and you’ll enjoy your next holiday season more than you can possibly imagine.
There’s something extra-super-duper special about spending actual money (not credit!) on special occasions. In fact, one YNABer found out about YNAB because a coworker was gushing about how great it felt to budget ahead for Christmas. It sounded so good, she got on the YNAB wagon and paid off $33k in debt in 14 months! How much do you want to bet that she budgets ahead for Christmas?
A Gift for the Whole Family
When you’ve got money in the bank, it releases a ton of the stress around Christmas. (Remember good ol’ Clark Griswold’s temperament, when he thought his Christmas bonus was canceled? Or, worse, when he found out that it was a membership to the Jelly of the Month Club, rather than a check?!) It wrecked his holidays!
Save now, and you won’t be preoccupied with financial matters next December. Instead, you’ll feel present and engaged—the stuff great memories are made of. And, when you find yourself pulling out your wallet for a mug of hot apple cider or a carriage ride (or whatever floats your Christmas boat), you’ll truly enjoy the occasion.
Budgeting: a Winning Tradition
Are you ready to make this Christmas the best one, yet? Great! Go add a ‘Christmas/Santa/North Pole’ category to your budget, and start putting dollars there every payday. And start now—Christmas, 2018, is merely 328 days away!
If you’d like a little guidance about how to get started, drop into our free, 20-minute, online workshop, Reach Your Savings Goals. Our teachers will be glad to answer all of your questions.
The post Reverse Engineer Your Cheer (a.k.a., Countdown to Christmas!) appeared first on YNAB.
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