Christmas 2020 will be an interesting one. We love Christmas and spending time with family, friends, and the food.
However, this year may be different for many of us due to Covid-19. You may be spending time with a smaller amount of people.
But, you will still need to save money for Christmas 2020.
Have you ever asked yourself how to have a great Christmas even if you're on a budget?
Certainly, Christmas is a time where people spend a lot of money and add a ton of debt buying Christmas gifts.
In fact, many don't have a plan to pay off the debt. Christmas comes and goes and they look at their empty bank account.
That is to say, Christmas 2020 may turn out to be different and your approach to saving for gifts should be different.
It's never fun to have an empty bank account. So, let's talk about how you can save money for Christmas 2020 and not rack up more debt.
Christmas 2020 expenses to consider
When you start to create your Christmas budget, you must remember all expenses, not just the gifts. For instance, you will need boxes, wrapping paper, and bows.
These items can add up quickly. However, you can save money by shopping at Dollar General or a similar store.
Also, you will need to factor in transportation costs if you are traveling for Christmas this year. Your travel expenses could include gas, airline tickets, etc. Making your reservations in advance will save you money.
Lastly, another expense to consider is food. If you are having Christmas Dinner at your house, you will need to budget for all of the food you will need to purchase. The more amount of guests you have, the more food you will have to purchase.
Important to remember, you will prevent adding debt by creating a Christmas 2020 budget and savings plan.
Related reading: 20 Ways To Save Money
How much the average person spends on Christmas
Most people know that Christmas can be very expensive! In 2019, the average American spent a little over $1,000 on Christmas gifts. To clarify, that does not include travel, food, or anything else related to Christmas outside of gifts.
In fact, even buying cheap Christmas gifts can add up quickly depending on the number of gifts you're buying.
Further, credit card companies target spenders during the holidays with special promotions. They offer things like 0% interest rates for a limited time to get people to sign up.
That's not going to be you this year! You know you're going to buy gifts or spend money for Christmas. You may not know exactly how much you will spend but you know you will spend each year around this time.
Creating a plan will help you get prepared and start saving ahead of time. This approach will allow you to avoid debt for Christmas 2020.
Create a Christmas savings account as a sinking fund
We love using sinking funds for budgeting purposes. When you create a plan on how you will be saving for Christmas 2020, you can organize your funds so you don't spend it.
Most importantly, sinking funds can be used to prepare for holidays so you don't have to come up with a large amount of money at the last minute.
To get started, open a savings account that you designate specifically to holiday savings so it's clear what it's for.
Creating a sinking fund allows you to spend it guilt-free on all of your gifts because that is your intent for this money.
Related reading: What Sinking Funds Are And How To Use Them
Create a budget item for Christmas 2020 savings
Now that you understand how much you need to save for Christmas 2020, you'll want to add a budget item for this amount.
You may be wondering how you can do that. Well, you will add up the total amount to purchase your gifts and divide that dollar amount by the number of weeks you have left before you need to purchase your gifts.
Most importantly, this gives you a great approach to how much to put away each paycheck towards your gift saving.
Related reading: Budgeting 101: How To Create A Budget
Plan to shop ahead of time
According to Clark Howard, the best sales for the holidays will start this month rather than December as usual. However, it's also a time where you can get side-tracked with fancy advertisements and impulse spending.
Creating a good approach will help you stay on track. We highly recommend you start saving and buying your gifts as early as possible. Hopefully, you've already started this process.
But, if you haven't, plan out the days you will shop and where you will buy. Also, leave those credit cards at home and only take the cash you've saved for buying gifts. It's important to remember the whole point is to avoid adding debt whatsoever.
Another thing, make sure you find and use any coupons you can find and download cashback apps such as Rakuten and Ibotta to save money. This is crucial so you're getting the most value for your money.
Increase your income to go towards Christmas 2020 savings
It's always a great idea to find ways to increase your income. However, for Christmas 2020 it's an even better idea if you're struggling to save for the holidays.
There are companies that are hiring for the holiday season. This is a great opportunity to make some extra money for your Christmas savings fund.
Another great option to increase your income is to start a side hustle from home. Some great side hustles include:
Related reading: Work From Home Jobs: 10 Best Ways To Make Money
Find alternatives to buying gifts
Certainly, everyone loves gifts and helping others. However, rather than buying gifts, you can help a friend or family member in other ways.
You can consider helping someone clean up their house or declutter their closet. You can also run errands for a disabled loved one. You can even consider simply spending time together watching movies and playing board games.
Important to remember, there are a number of ways to spend Christmas without having to spend a lot of money on gifts. You have to get creative and find ways to make the holidays enjoyable.
Final words – how to save money for Christmas 2020
The tips in this article should give you ways to create a solid play for the holidays so you don't add any debt to your finances. The main goal is to create a plan and stick to that plan.
We hope your holiday season is great financially and you enjoy your time with your friends and family!
What other tips would you add to this list?
Have you already started your holiday shopping?