When Should I Start Saving for Christmas?

Most of us buy extra things at Christmas. We will normally buy gifts for friends and family as well as buying extra or more extravagant food and drink. It is possible that we will also buy new clothes for parties and visiting, buy decorations and have to pay to travel more. We may even have a holiday. This means that we will have to spend a lot of money. It can be really wise to think about how we will afford to pay for all of those things.

Some people might borrow money to pay for this. Some may find that they will be able to pay it from their normal income, perhaps over a few months and some people will buy things throughout the year to spread the cost. However, there will be some people that will decide to save up the money to pay for it. They may wonder how long they will need to save for.

Calculate How Much You Need to Spend

To start with you should work out how much you will need to spend. It is not always easy to work this out as we may not spend out the same each year and we may not stick to a budget but just spend until we run out of money. However, there are ways that you can work it out. Firstly, count up how many presents you are likely to be buying and how much you are likely to spend on each. Add in some extra for wrapping and for cards. Consider whether you will be buying more decorations. Think about whether you will have any parties and if so, how much that might cost. Decide whether you will be buying new clothes. Think about whether you will be buying anything else such as a holiday, a few nights away, travel to different houses etc. You will end up with an approximate figure but it will give you something to work with.

Calculate How Much you Can Afford to Save

Now you need to take a look at your household expenses and work out how much you will be able to afford each month. Take a look at how much money you have coming in each month, whether form salary, interest, benefits and things like this. Add it all up together. Then work out how much you will spend in a typical month and add that in to it. You may not spend a regular amount each month so you will need to work out an average amount and use that. By taking away the amount of money that you spend from the amount that you have coming in, you will be able to calculate what you will have left to save in a typical month.

Come up with a Plan

Now you will know how much you need to save each month and how much you can afford to save each month. These figures are very unlikely to be the same. If you have more available to save than you need then this will be fine and if you save the amount you need to each month, you will have money left to do with what you wish. However, if you do not have enough money left to save enough each month, then you will need to figure out what to do. You could decide to not save anything and borrow it all instead. However, there are alternatives.

You could save less and reduce the amount that you spend at Christmas or save less and make up the difference by borrowing. Another option is to see whether you can reduce the amount that you spend or increase the amount that you earn so that you have more money available to spend. It may be easier to do one of these than the other but trying to do both will be the way that you will be most sure that you will be able to get the money that you need.

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