People are often shocked when I tell them that my family saves $3372 per year for Christmas:
“That is a pretty extravagant Christmas”
“We don’t spend nearly that much, wow, that is a lot of money”
This is true, $3372 is a whole bunch of money, but in reality, it is not as shocking an amount of money to save for Christmas as you think, once you understand WHAT is included in that total.
The REAL Cost of Christmas
When I talk with people about saving for Christmas, and Christmas spending, what I have found is that people are only thinking about the cost of the presents they will be purchasing for Christmas.
“Last year we spent $600 on presents, so we are saving money for that this year”
Then, after Christmas and New Years are over, these same people are confused and upset when they have far less money in their accounts than they expected.
“But, we only spent $600 on presents”
The problem is, Christmas spending includes so many things beyond the presents you buy for people, and it is all of these other costs that quickly add up and drain your bank accounts, and increase your credit card bills, far quicker than you imagined.
My family’s Christmas savings are $3372 because we include the true total cost of Christmas in our spending plan. We include:
- gas used to shop for presents
- coffee and food consumed while shopping for presents
- hotel rooms during shopping (we live in a small town and usually travel to shop)
- gas for travel to visit friends and family
- road trip food and drink while traveling to visit friends and family
- postage for mailing presents
- Christmas parties, dinners out with friends
- groceries for Christmas dinner and other dinners during the holiday
- hotel rooms during Christmas if needed
The reason we save $3372 for Christmas is because we are taking all of the different costs of Christmas into account, and adding in a bit extra just in case.
If we don’t spend that much during Christmas then we can move that money into a savings account, or a vacation plan, or put more money into Fionn’s university fund, or our retirement fund.
(This year we are trying to save as much of our Christmas money as possible to buy family backpacking gear)
Now, you may not have to travel as much as we do to visit family (we live 4 hours from one set of grandparents and almost 10 hours from the other), you may not eat out as much, and you may buy fewer gifts.
Your Christmas expenses may look very different. The important part is: remember to include ALL of the different expenses you will have this Christmas. Surprises will always pop up, but the closer you can estimate your actual costs for Christmas the better you can stick to your spending plan, and the less credit you will have to use.
If you want to read more about saving money for Christmas check out my previous post where I list six articles I have previously written about controlling your holiday spending: