Do you ever find yourself scrambling to put together money for Christmas gifts, decorations, and holiday activities or charging your festivities on a credit card? What if you were able to pull out cash you had saved up to spend like a boss instead of scrambling and penny-pinching, or charging and stressing? Today I’m going to tell you exactly how we save $1000 cash for Christmas by November 1st!

The secret to saving money for Christmas is very simple, but for some reason, many of us never get around to it and the holiday scramble becomes a habit.

The secret is to set aside money every single month of the year for Christmas so that when the season begins, you are ready! Here is exactly how we do it and how you can do it too.

HOW WE SAVE $1000 FOR CHRISTMAS BY NOVEMBER 1st

1. Start a Christmas sinking fund on January 1st

A sinking fund is a specific savings fund that you set up for an expense or purchase you know is coming up. It is common to set up sinking funds for Christmas, car maintenance, 6-month insurance premiums, and so on.

On January 1st, I get out a cash envelope and make it all cute and Christmassy so it’s easy for me to save my cash!

Next, I determine how much I want to save, and how much I’ll need to save each month to reach my target amount by the goal date.

For us, we would like to have $1000 for Christmas. This gives us enough money for gifts, decorations, activities, and charitable giving. We plan to save from January – October so that the funds are ready for the season starting on November 1st. That means we have 10 months to save $1,000, and will need to set aside $100/mo to reach our goal.

2. Start setting aside money every month

After we determine how much money we want to have saved and the timeframe it will take to save it, it’s time to start setting aside money every month!

When a new month begins, I make a trip to the bank and take out $100 from my checking account and put it into my cash envelope for safekeeping.

In my budget, I have a line item/category that says “Christmas fund.” Once I take out the cash, I mark it as “spent” on my budget. This is because the money is as good as spent. When Christmas comes around, I will spend the Christmas cash I saved up without marking it again on my budget.

Consistency is key here! Make sure you set the money aside, or you won’t reach your goal!

You can also set your money aside in a savings account! Either way works.

Related reading: How to Make a Budget: Step-by-step Guide

3. When Christmas comes around, make a plan for the funds and have fun spending them!

When November 1st hits, we will have $1000 saved up to spend! It’s absolutely delightful to have cash waiting and to fully enjoy the season without the money stress.

Even though I already marked the $1,000 on my budget as spent as I saved it, I will still make a plan for the $1,000 to make sure I put it to good use! This will help me stretch the money, make sure I can afford all the things we want to buy, and not overspend.

Tips to Make Your Christmas Sinking Fund More Successful

• Keep your Christmas Sinking Fund money wherever you are least likely to spend it. For us, that’s in cash. For you, that may be in a savings account! Both work great, just know yourself.

• You can set aside money monthly, or some from each paycheck. Whatever works for you!

• Some banks and credit unions have a “Christmas Club” where they’ll actually deduct some money from your paycheck before it hits your bank account and save up for Christmas for you!

• A good Christmas Budget is between $300-$2000, depending on what you can afford. Be honest with your situation and don’t try to save more than your family can afford. We spent many years having only a $300 Christmas, and they were just as memorable as the bigger Christmases. If you can afford more, enjoy!

• You can start on January 1st, or sometime in the middle of the year if you just learned about this method! Just adjust the amount you need to save per month. Some money saved is better than none, so get started today!

The best part about Christmas is being with the ones we love, enjoying the cheer of the season, and giving! When we save money for Christmas, we’re able to enjoy the season fully without worrying and stressing about money or carrying debt with us into the new year.

Are you going to save money for Christmas like this next year?

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