How to have a Debt Free Christmas.
We all know that Christmas comes every 12 months. It’s never a surprise, and is a fact of life. I absolutely love the Christmas season. I love the traditions, the lights, the love shown to others. What I don’t love is the cost (anyone with me on this??). When you include holiday parties, gifts, travel, etc. the expenses add up fast. One of the best things I have learned is to plan for this holiday well in advanced (like a year in advance). Today I want to share with you how to save money for Christmas so that you can enjoy a stress free holiday!
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Are you looking for an easy way to keep track of your Christmas expenses? Something that will help you stay on track with your budget? You can get my free Christmas Expense Tracker at the bottom of this article!
I love using this expense tracker to help me make sure I can enjoy the Christmas season, without overspending on my budget.
1. Set Up a Christmas Sinking Fund
Every January you should set up a Christmas sinking fund in your budget. This is very simple to do and extremely effective.
A sinking fund is setting aside a small amount of money for a longer period of time in order to save up for something specific. A few common sinking funds are for: travel, buying a car, etc.
A Christmas sinking fund will give you the confidence to spend for the holiday guilt free because you already have the money saved and ready.
To set up your Christmas sinking fund simply add up how much money you spend on Christmas and divide it by 12 (for 12 months).
For Example: If you spend $500 on Christmas your equation would look like: 500/12=$42
Starting in January you will need to save $42 every month for the next 12 months. By the time December comes you will have the money you need for a guilt free holiday!
2. Use a Credit Card
One of my favorite ways to save money for Christmas is by using the cashback on my credit cards.
I know many people in the finance world look down on the use of credit cards, and I get it! If a credit card is a spending temptation to you then do NOT use one.
If however, you are able to stay in budget with a credit card and pay it off in full monthly than this is an easy way to save for Christmas.
My husband and I prefer to purchase half of our expenses on our Discover Card. With each purchase we earn cashback (usually somewhere between 1%-5%). We allow this cashback to accumulate throughout the year and only use it to help us pay for Christmas.
This is such an easy way to save because it never feels like a sacrifice! We spend as normal and earn free money at the same time! Woo!
- BONUS! You can get a $50 bonus when you sign up for a Discover Card and make your first purchase within 3 months. Just make sure you pay it off monthly!
3. Save Your Pennies (literally)
Every year our family chooses a family to give Secret Santa presents too. These are names that we hear of in the community that need some extra love during the holidays. I love teaching my kids that giving is more important than receiving.
Years ago we decided to start a “Giving Jar.” The concept is simple really.
Starting in January we begin saving every coin we get throughout the year (using cash envelopes helps with this). The goal is to have a jar full of coins by December. We use this money to pay for the presents we buy for the family in need.
Now, your family doesn’t have to use your coins for Secret Santa presents. But, you can save your coins throughout the year and use them in December to help pay for the holidays.
Get your kids involved in the fun and use the coins on a fun family activity or treat!
4. Fetch Rewards
Fetch Rewards is one of my favorite ways to earn cashback. Mostly because it is just so easy!
You can download the Fetch Rewards App here. Download the app here, scan your receipt after you go grocery shopping and points are automatically put into your fetch account (this seriously takes less than a minute to do!).
These points can be redeemed for gift cards to all of your favorite stores (like Amazon and Target in my case!).
Save up these points throughout the entire year and when the holiday season comes around redeem them to use at stores to help you pay for Christmas presents. Amazon is where I do most of my Christmas shopping, so obviously I will be redeeming for an Amazon gift card.
Download Fetch Rewards here and enter code FETCH2K for 2,000 ($2) bonus points when you scan your first receipt!
5. Take Advantage of Cash Back
Similar to Fetch Rewards (where you earn points to redeem for gift cards) are cash back apps. These apps will give you actual cash back on items you buy during regular shopping trips. Two of my favorite cash back apps are Rakuten and Ibotta.
Rakuten is so easy to use, you usually don’t even realize you are using it!
First, sign up for Rakuten here. Now, every time you shop online do it through the Rakuten website.
To do this just log into the website, select the store you want to shop at. You will be redirected to the store you clicked on; now just shop as normal and then you’re down!
You will automatically earn cash back! Easy right?!?! Sign up for Rakuten here and you will receive a bonus $10 after you spend your first $25.
Ibotta is just as easy (if you can believe it!). Download the ibotta app here. Now, every time when you shop at a grocery store simply log into the app, check the grocery items you bought, and then scan your receipt. You will be rewarded with cash back on any qualifying rebates.
I like to save up my earnings from Ibotta and Rakuten until the end of the year. Then I use this money to help us pay for Christmas. It has truly been a huge blessing for our family!
6. Start a Side Hustle
Consider starting a side hustle as a way to earn some extra money in addition to your current form of employment. A side hustle will be something you will do in your spare time. Save everything you earn from this job to be spent on Christmas.
I know someone who started a Christmas lights hanging business and every penny goes towards their Christmas. I’ve always thought that was an excellent idea for a short term side hustle. If you are needing more ideas check out these side hustle ideas listed here.
7. Sell the Clutter
Clean out all of your closets and basement storage rooms to find items to sell. My personal rule of thumb is, “If we haven’t touched it for a year then we don’t need it anymore.”
You can sell these online using any of these websites or have a yearly garage sale and get rid of the junk in one day. Save the money you earn from selling your clutter and put it into your Christmas Sinking Fund.
Choose a few of these methods to help you start saving for Christmas each year, or better yet, use all 7 of them for an even less stressful Christmas. The most important thing is that you have a plan and you implement it.
Christmas Expense Tracker
***Grab my free Christmas Expense Tracker here.
Feel free to use this free printable to help you track your spending this Christmas so you can enjoy a debt free holiday season!
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How do you save for Christmas each year?
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