How to start saving for Christmas in 2021

It’s hard to know how much to save if you don’t know how much you need. Try to estimate the amount of money you spent on gifts in previous years, and consider ways to maximize your impact with minimal spending. Once you’ve got a target number in mind, then you can save effectively.

If you have to think every time you put away a little money, chances are you won’t end up saving as much as you should. Financial situations change over the course of a year, and a few dollars may seem like too much to spare some days, even if it won’t make a huge difference in your overall financial health (but will make a huge impact on your Christmas season). Designate an account at your bank for Christmas savings, then set up a (small) automatic withdrawal from your main cash account into the savings account for every couple weeks. By the time you check on your savings in December, you’ll have plenty of gift money.

According to DoughRoller, some credit unions and employers offer holiday clubs that offer a formalized framework for automatic withdrawals. If you’re worried you won’t be able to stick to your own withdrawal schedule, committing to a holiday club can help you commit to a full year of saving.

Instead of saving up all year to purchase gifts during the pre-Christmas rush, purchase strategically throughout the year. Sales around Memorial Day, the Fourth of July, and Black Friday are all great times to buy, but you may come across random deals at other times too. There’s no reason to let an opportunity go by in April if you’ll end up buying that same item at full price in November.

From nixing unused streaming service subscriptions to swapping generics for brand name drugs to reducing energy costs, there are lots of little ways to cut down on your month to month spending, all made easier by reminding yourself that you have a holiday saving goal in mind. Take a look at all your expenses for a given month and reassess what’s more or less important than a merry Christmas.

Personal finance advisor Dave Ramsey suggests using apps like Ibotta, Rakuten, and Receipt Hog to find extra savings while shopping online. These apps give you rewards for everyday purchases like groceries, sometimes requiring you submit receipts after purchase to redeem them. It’s worth a few extra minutes for a few extra bucks if you can make a habit of using them.

Ramsey also suggests rethinking the small bits of cash you might have left over by coming in under your monthly cost estimates on regular bills. If you happen to use less energy or buy less clothing one month, don’t just use the extra cash on the next month’s bill, but store it away instead.