Simple Steps for a Cash Only Christmas

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.

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  • Melanie

    Congratulations! We had our second annual cash-only Christmas this year, too. :-) I started late, in May, and only budgeted to save what we could manage as we got our finances under control… and then we experienced a layoff for a couple months, so the fund wasn’t nearly as big as we (read: my husband!) wanted it to be. But he got a big (November) cash birthday gift from his mom–and what he really wanted was to buy more Christmas presents, so that’s what he did.

    Next year, we start in January, and I divided by twelve–because that’ll keep that last payment firmly planted in December to buy a tree and the small stuff I forgot to plan for. :-)

    Last year was just sort of working overtime and spending bonuses, but this year was much much better. Next year should be better still. Two thumbs up for savings accounts and automatic deposits.

  • emeyer

    This is a great idea. Currently my credit card has about double the charges it would normally have on it after buying all the family Christmas gifts. I can afford to pay it off (in full and on time) but it will mean that there will be no dinners out, new clothes etc in January. In 2009 I plan to put $25 a week directly into an online account so that come Christmas I can just pay cash! Thanks for such a great idea.