Christmas 2007 was my first cash-only Christmas. That was a great experience and I would never dream of using credit cards to pay for Christmas again. However, this year I’ve made the cash-only Christmas even better by starting a ‘Christmas Fund’ back in January of this year. My Christmas Fund is a savings account at ING Direct with a monthly auto-transfer to cover this year’s Christmas spending.

It’s a great feeling to know that not only will Christmas shopping not put a dent in my normal monthly budget, but thanks to the spirit of frugality this year, I’ll actually have a fair amount of money left over that I can save or pay down debt with. Nothing makes personal finance easier than a little planning and proper execution.

If this wasn’t your experience this year, I’m sorry and, believe me, I can relate. Everything I’ve just talked about would have sounded rather nutty to me up until about a year ago. It’s not too late to prepare for next year though. If you start now, you’ll be ready for Christmas in 2009.

How to prepare for Christmas 2009:

  1. Plan how much you will spend in 2009
  2. Divide that number by 11 (assuming you will save from Jan – Nov)
  3. Open a savings account and call it your Christmas Fund
  4. Set up a monthly auto transfer
  5. Your work is done until next December!

This is a great way to cut down on stress during the Holiday season and it makes it easy to keep your budget under control.