Years ago, banks offered Christmas funds, special savings accounts you contributed to all year. When the holidays rolled around, you didn’t have to worry about how to budget for gifts—you could withdraw your Christmas fund without having to compromise your finances elsewhere.
Whether you visit the bank in person or do most of your banking online, there’s nothing stopping you from creating a Christmas fund of your own. Don’t worry about shopping all year long and stashing away gifts. Simply divide the amount you typically spend on holiday gifts by 12 and move that amount to savings each month. If you travel during the holidays or host a gathering, include those costs in your holiday budget.
The “Christmas fund” method is good for other holidays too. If you plan all year for your family reunion or don’t want to miss the annual girls’ trip to the beach, prioritize saving for these events and you’ll be better prepared when it’s time to pay the tab.