Let’s be honest here; it’s not like the holidays come by surprise.
Yet every year, we all seem to be scrambling to get the money together to buy gifts while staying on budget. Or worse, we completely blow the budget we spent all year working so hard to maintain.
The easy answer to this problem is to set a budget for your holiday spending and start saving earlier in the year. Of course, if budgeting were that easy, no one would ever need budget advice!
So I’ve put together some helpful tips and ideas that will help you (almost) effortlessly budget for next year’s Christmas gifts.
Something is Better than Nothing
If you’re reading this post later in the year, it’s going to be a bit tougher than if you started saving in January. Don’t let that discourage you! Saving some money for Christmas is better than not saving anything at all.
A tight deadline doesn’t necessarily mean you can’t accomplish your goals, either. Some of these are ways to save money for Christmas fast! Selling stuff, second jobs, and side hustle especially can earn you a lot of money depending on how much you work.
12 Ways to Save Money for Christmas
1. Set a Christmas Budget
If you want to save a specific amount, then you’ll need to have a savings goal. How do you decide what your Christmas budget should be, exactly? An easy place to start is by taking a cold, hard look at what you spent last year. Go over your gift-giving and bank statements.
Then add it all together.
The number might be a little bit shocking, but if you plan for next year, at least that money will be set aside. You could also decide now that you’re going to pare down your spending for next year. Maybe do more group gifts or host a family gift exchange, for example.
Another way to figure out your budget is to set a dollar amount for each person that you’d like to stick to next year. Just remember to be realistic with this one; if you have kids, for example, you might want to give them a lot of Christmas presents.
That’s OK! Just make sure you budget accordingly.
2. Open a Separate Savings Account
Find a bank that doesn’t charge for savings accounts and open one dedicated to your Christmas money. That way you’re not tempted to spend it, and it’s not confused with your regular savings.
After all, saving money for Christmas is more “planned spending” than actually saving money. Some banks offer certain benefits on savings accounts, too, so shop around for the best deal to make your money stretch further.
Automate Your Savings
If you’re not the kind of person who’s disciplined with your savings, then automation can be your friend. The most common way people automate savings is with the “pay yourself first” idea. You have the bank take out a certain amount every payday before you even get a chance to spend the cash. That way, you don’t miss it.
Another great savings technique if you use your debit card a lot is a per-transaction “tax.” You can usually choose from a few different amounts, and the bank automatically deposits that per transaction in your savings account. You probably won’t miss the $2 here and there, but it can add up by Christmastime.
3. Try a “Savings Challenge”
You see, these pop up at the start of the year, but you can jump in at any time. One idea is to work backward, depositing $52 at the beginning of the year and lowering it by $1 per week. It totals more than $1300! If you start halfway through the year with a savings plan, either try and add a lump sum for the missing amount or start at the beginning ($52), cutting out the lower numbers. You’ll still end up with a decent amount come Christmas!
If you use a lot of cash, you can also decide you’re going to save all your $5 bills (or any amount you choose). Or you can always throw all your spare change in a jar. It won’t equal as much as your bills, but if you don’t need a lot for Christmas gifts, it might be an easy way to save.
4. Get a Second job
A lot of us already have our budgets stretched as far as possible. For many people, it’s not that Christmas comes by surprise each year, but that they didn’t have the extra money to set aside to save for it. If that sounds like you, don’t let Christmas put yours further behind.
Instead, make more money!
The service sector is a great place to look for something that will work around your day job. I know someone who took her family on Disney vacations every year, working part-time evenings and weekends at Walmart. Depending on your budget, a few shifts a week at a retailer or fast food place might be all you need to save money for Christmas.
The easiest way to make sure you don’t spend that extra money is to have your paychecks from the second job deposited right into your Christmas savings account.
5. Start a Side Hustle
If you have any marketable skills, a side hustle is a great alternative to getting a second job, and you’ll have more control over your time. This could be anything from starting a bookkeeping business on the side to knocking on your neighbors’ doors with a shovel during a snowstorm.
Casual babysitting, yard work, pet sitting, and house cleaning are all great examples of side hustles you can start with little or no experience.
Just like everything else, make sure you put all your side hustle money directly into your Christmas savings account.
6. Take Advantage of Rewards Programs
We aren’t a cash-only society anymore. If you don’t already have a credit card with an excellent rewards program, now’s the time to get one! There’s plenty out there with no annual fees.
No, I’m not suggesting you carry a balance on a credit card. Ever. But, if you pay your card off every month, you can take advantage of these great cashback programs without being charged interest or fees.
The same thing goes for in-store rewards, which a lot of places have now, even the grocery store!
Save up all these rewards for Christmas time and use it for your Christmas shopping or to offset other expenses (like groceries) to free up money for gifts.
7. Sell Your Things
This one always seems to pop up on money-saving lists, and for a good reason, it works. Most of us have way more things than we need. So why not use that to your advantage?
You get to kill two birds with one stone here.
- First of all, your house will be decluttered.
- Second, you can earn extra money for Christmas gifts.
If you have a lot to sell, consider starting with a garage sale. It’s a way to get rid of the most things with the least amount of effort, including some of those small items you otherwise wouldn’t bother selling.
Another option, especially if you have large or valuable items to sell, is to post them on local buy and sell groups or even your personal social media pages.
Unique items, especially vintage items, and collectibles such as Pokemon, can also be sold online with places like Etsy or eBay.
If you’re afraid to sell online, contact local antique stores, pawnshops, or even flea markets and see if someone might be interested in purchasing your valuables.
8. Set Aside Your Tax Refund (or Other Unexpected Cash)
If you get money back on your taxes, don’t treat that as a bonus that you run out and spend.
Since it wasn’t part of your regular budget, it shouldn’t be part of your regular spending, likewise to any other cash you receive unexpectedly, like a bonus at work.
Set aside the amount you need for your Christmas budget before you spend your “extra” money on anything else. That way, you know Christmas is taken care of and don’t have to think about it until later in the year!
9. Save Your “Savings”
If there is any room to cut in your budget, take whatever you pare down and put that amount right into your Christmas savings account every month. You could even jump-start your holiday savings by planning a no-spend a month.
Not only is it an excellent way to break overspending habits and an excuse to eat up all the food in your freezer and pantry, but you’ll also have some cash leftover at the end.
This is true for any savings you encounter in your life. Did you budget $600 for a flight that ended up only being $450 because of a sale?
Whenever you come up under budget during the year, put that “savings” right into your Christmas savings account.
10. Quit a Bad Habit
If you needed an excuse besides your overall health to quit a bad habit, let money be your motivator. Whether it’s something significant like smoking or a seemingly innocent habit like ordering Uber Eats after a long day of work, making that lifestyle change can add up financially.
Take a look at the costs of your bad habit and add up how much it totals a year. Whether you choose to quit entirely or cut back is up to you, but definitely give yourself clear limits if you choose the latter.
Then take the amount of savings, minus any extra costs (another meal at home in your food budget, smoking cessation aids, etc.) and make that your savings amount every month once you quit.
11. Stay in (and set Aside the Savings)
This is another lifestyle change to help you “find” some extra money for Christmas gifts throughout the year. If you’re invited out and have the money in your budget to go, sometimes opt to stay in instead. Then take that money you would have spent and add it to your Christmas savings account.
I know someone who managed to spend $400 over the Christmas holidays this year going out. That might be extreme, but by the time you buy food or drinks out, pay for the gas, and if you’re a parent, hire a babysitter, even a simple night out can be pretty costly.
12. Cut out Cable (or Another Monthly Expense)
If you’re serious about saving money for Christmas then sometimes you have to do drastic things. Or, depending on how much you actually watch TV, maybe not so radical.
Either way, for most people cutting out cable, can save $50-$100 a month. Once it’s gone, take that regular bill payment and transfer it to your Christmas savings account.
If you’re already a no cable household, take a look at what you do pay for regularly and see if something can be cut.
- Do you use all your streaming services?
- Can you cut your monthly pedicure, or reduce it to every other month?
- Do you get pizza every Friday?
- Can you cut back your cell phone plan?
Don’t do Just one Thing
Each of these ideas is great, but might not be realistic if you have a large Christmas budget to save for and are already busy. The best way to achieve your savings goals is to do a bunch of small things that add up.
For example, cutting a $10 a month streaming service doesn’t seem like much, but if you do that, and sell $300 worth of stuff, and side hustle another $400, and cut out one take out meal a month (and put all that in your savings account) you’ll have about $1000 saved!
With a little bit of motivation and discipline, anyone can save money for Christmas gifts. That way, you can not only be a great gift-giver, but you can also enjoy giving those gifts without worrying about holiday hangover come January.
Michael launched Your Money Geek to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.