Is Christmas on your mind?? Probably not.
It should be, though.
Did you know there are 265 days left until Christmas and 241 days left until December 1st?
Sounds like forever, but like every other year, it will creep up when we're least prepared, and we'll hear people say,
"I can't believe it's December already."
In my previous financial life, December 1st would roll around, and I'd begin charging all the extra 'holiday' expenses to my credit card. Then, I'd put off buying gifts until the last minute - as if I could reduce the necessary financial outlay somehow.
When the credit card statement arrived in January, I'd put it off too. To cope, I'd put my personal life on lockdown to recoup from the debt I built. Guess what happened the next year, and the next year, and the next. The same thing!!! Over and over and over.
So, how can it be that we have 365 days to prepare, and every year, the holiday season is a significant financial pain?
I want to challenge you to make this year's holiday season different.
To get started, begin by quantifying the additional expenses incurred for December of last year as a result of the holiday season. I'm talking about what you spend during December that is over and above the other things you 'usually' pay for. Include things like gifts, wrapping, cards, shipping, and all the special outings (parties, cab rides, booze, etc.) for December. You might attend more dinner parties and travel more too.
Pull your credit card statement and debit statement for last year. Add up all these expenses. Then, take the total and divide by 9. Nine is the number of months until Christmas.
Whatever number you get is the amount you should tuck away each month starting this month.
To make this relevant, let's consider an example. Say, I need $2,000 in addition to my regular expenses. I might spend $1,500 on gifts, then $500 for parties, cab rides, etc. I'd take $2,000 and divide by 9 - this means that starting this month I should tuck away $222 a month to have enough saved by December.
The typical reaction to the monthly figure is, whoa, I can't afford that! Unfortunately, you will be forced to afford it, when you inevitably have to afford the credit card bill.
To make it less painful, divide your total by the weeks left until Christmas. In the case of this example, I could tuck away $56 per week instead of $222 per month. The same result, but dividing by the week might seem less psychologically daunting.
If you're wondering where to put the money - I would suggest opening a sub-account. A savings account is best, so it's slightly cumbersome to withdraw money in the event you're tempted to dip into these funds earlier.
Imagine December rolling around, and you have $2,000 banked already. January 2018 will be looking rosy. While everyone else copes with paying off Christmas - you'll have it wrapped up.
I hope you find this helpful!!