Money Tip #1

Fun fact about me that you may not know: I'm a huge financial nerd. I'm slightly in love with money guru Dave Ramsey, and I'm not ashamed to say it (except if he's talking politics, then I'm just slightly ashamed). I've read all of his books and I download his podcast every day. One of my most precious possessions is my crazy Numbers (Mac's version of Excel) budget worksheet, which I diligently update pretty much every week. I keep a close eye on our finances because I have a lot of lofty goals for our future (travel, vacation home, etc.), and I don't want money to stand in the way of us achieving those goals. We plan to be totally debt free at some point this calendar year, which I'll talk about in another post. 

Because of my quirky love for all things financial, and my love for teaching people about those things (quick note: I am not an in your face, over the top, must tell everyone about Dave Ramsey until everyone hates me because they're so sick of hearing about it type of person, but a decent number of our close friends and family members know of my passion in this area and have approached me with questions about it over the years, and in that situation I truly love sharing my knowledge with them), I figured I would start a little series on the blog with various money tips. So now that we got all of that out of the way, here's my first money tip:

Money Tip #1: Start Saving for Next Christmas Right NOW.

Maybe that's not the most earth-shattering, awe-inspiring money tip to give as my first ever tip, but give me a moment to explain.

It's January. Although it feels like the holidays happened forever ago (or is that just me??), really they were just a few weeks ago. Maybe this month you got your credit card bill and were shocked by your balance. Maybe the first week or two of January were a little tighter than you'd like, because you drained down your bank account buying Christmas gifts. I've been there. Another thing about myself: I'm a giver. I love gifting people with presents, and Christmas is my Super Bowl. I spend an inordinate about of time planning out what I'm going to get people, scooping up little hints and mentions throughout the year and tucking them away until December. Along with spending a lot of time figuring out what to buy people, I also usually spend a decent amount of money making sure I buy the most perfect gifts that I can think of. In the past, this was an issue. You see, we all know that Christmas comes every single year on December 25th. Without fail, there it is. But somehow it sneaks up on us financially because we just don't plan for it. Logically, we know it's coming, but we don't properly prepare. We overspend, and then we regret it. Can you take a moment to think about how nice it would feel to have a whole lump of cash saved up, so that this year when Black Friday rolls around and the mayhem surrounding Christmas shopping begins, you already have all the cash laying there and ready for you? What a good feeling. And it's possible! You just need to start today. So here's what you need to do:

1. Create a separate checking account to label "Christmas" (if your bank allows you to do this, which hopefully they will).

I love having several separate checking accounts with our bank. I currently have five of them: Checking, Savings, Vacation, Christmas, and "Special Savings". Being able to keep these accounts separate (but all under our joint account, so that I can see everything when I log in to our online banking and easily transfer money from one account to the other) is an awesome tool for being able to save for certain items. If I kept all of our Christmas money just in with our regular checking account, chances are I might end up spending it. Keeping it separate makes that nearly impossible. Check with your bank, but we've done it with every local bank we've ever had without any issue. 

2. Figure out your total Christmas budget. 

This sounds a little daunting, but I promise it will be less painful than you think. Maybe you already have some numbers in mind (i.e. you usually spend $50 on parents, $20 on friends, etc.), but if not, you can just go back through your bank statements in the month or so leading up to Christmas (or whenever you did the bulk of your Christmas shopping) and try to get a rough total. If you spent, say $1,000 on Christmas this year, then that would be your budget. If you know everyone that you buy for and have a rough idea of what you spend on them, add all of those numbers together and get your total number. It doesn't have to be exact - just get a number in mind. 

For example, this is my personal Christmas budget:

Parents: $75 per parent, x5. Total: $375

Siblings: $30-$50 per sibling, x4. Total: $120-$200

Grandparents: $15 per grandmother, x3. Total: $45

Cousin Gift Exchange: $30, x2. Total: $60

Random Friends or Other Gift Exchanges: ~$100

Grand Total: $780

(Matt and I also buy for each other, but we typically just use our own "fun money" for that, so I don't necessarily include that in my Christmas Budget.)

3. Determine how much money you need to save each month to reach your grand total, and then transfer that amount into your Christmas account.

Simply take your grand total from above and divide it by 12. $780/12 = $65 per month.

(Side note: I usually put between $50 and $75 in per month, and sometimes I put in as much as $100. I like to have a little extra padding, and then that helps pay for things like Christmas cards, random hostess gifts or other unexpected gifts you end up buying, or even a new outfit for a Christmas party. If I have $1,000 in that account by the time Black Friday rolls around, I know I am good to go.)

4. Do this every single month until Christmas, and then complete your Christmas shopping with the peace of mind that comes with knowing Christmas was paid for in cash and that you won't be experiencing any buyer's remorse come December 26th! 

So anyway, that's my first money tip for you. Start today, and I promise you won't regret it! Stay tuned for more tips in the future. 

xoxo,

Steph