Here we are in mid-September, settling into our frantic fall filled with work, school activities for many, football, the World Series, Halloween and Thanksgiving.
Christmas follows swiftly. It’s only 14 weeks away.
Are you ready?
We can’t stop the clock, but planning now can ease holiday stress later, advises Todd Pietzsch, spokesman for BECU, Washington state’s largest credit union.
It can also save you money.
Set a savings goal
First, figure out how much money you think you will need for holiday presents. That’s your Christmas savings goal.
Pietzsch told Money Talks News you should assign a dollar amount to each person for whom you’ll buy gifts. Who’s on your list? Children, parents, spouses, nieces and nephews, brothers and sisters, friends? The office gift exchange? Anyone else? Can you pare your list?
Add it up. And if you haven’t put any money away yet for the holidays, divide by 14. Try to put that much away each week starting now by paying yourself first.
For example, say you want to spend $500.
Putting $36 a week away now will yield $504 by Christmas to cover presents.
Set up an automatic deduction from your payroll check, or automate transfers from your checking account to your savings account, Pietzsch suggests. You can set up an account with a name, such as Christmas Club.
Saving now means charging less for Christmas presents, even if you don’t reach your total savings goal.
“You don’t want to get hit with a lot of credit card debt you can’t pay,” Pietzsch says.
If you charge $500 in gifts on a credit card with an 18 percent interest rate, and pay only the minimum balance due each month of $20, it will take you 42 months, or more than three more Christmases, to be rid of this year’s holiday debt, according to online payment calculators. In that time, you will pay $674 total including interest, making this year’s gifts cost about one-third more that you planned.
Source: MoneyTalksNews | Jim Gold