Is It Too Early to Start Planning a Cash Only Christmas?

cash only christmas

Okay so it’s only been 2 months since we celebrated Christmas, but did you find it overwhelming? Did you find that you spent way too much? Or did you find that you  were short on money again and barely had enough money to buy the things you wanted to buy to have a nice Christmas dinner with your family?

Many people don’t even think about Christmas until October or November. Maybe it is because they live in a colder climate and the first snow fall makes it feel like Christmas. Or perhaps they live in Germany and all the lovely outdoor Christmas markets are popping up.

For some people it is okay to wait until November or December to plan Christmas, and it may work out fine, but for those of us on a tight budget, waiting until then can quickly raise our stress levels and put us into panic mode.

So instead of waiting and then panicking, why not start early and plan to have a cash only Christmas this year?

A cash only Christmas is pretty self explanatory and it is an excellent way to save money. Instead of paying for Christmas with credit cards, you only pay with the cash that you have.

But what can you begin doing today to ensure that you have enough cash to pay for Christmas in December? Here is a short list of things that you can do this year to get ready for a cash only Christmas:

Figure out how much last Christmas cost you.

Grab a calculator and add up your bills from this past Christmas. If you didn’t keep them, try to come up with a good estimate. Once you have your total add 5 – 10% for any miscellaneous items. It is better to over-estimate a bit now then to run out of money in December. You have 9 months until December 1st. Divide the amount you calculated by 9 which will tell you how much money you need to put aside each month.

Based on your current budget how much can you afford to set aside each month for Christmas?

Take a look at your current monthly budget and see if there is extra money that you can begin to allocate towards a Christmas fund. Perhaps you can allocate $50 or $75 a month over the next 9 months. Or maybe you can only allocate $10 a month. Whatever your number is, begin putting that money aside now.

Are there ways that you can begin making more money for Christmas?

If the amount that you figured out that you will need for Christmas exceeds the amount that you are able to put aside every month, then now is a good time to look for quick ways to make some extra money so that you will have what you need come December. Some ideas on ways to make extra money are:

  • asking for a few extra hours at work if you currently have a full-time job
  • if you are creative you could consider making and selling items on
  • you could also look at doing some virtual freelance work online
  • if you are good at social media you could offer your services to some small local businesses in your city

Make your gift list now and buy things as they go on sale.

The next step is to start making your gift list now. Include relatives, friends, teachers, whomever you normally buy gifts for. This year keep in mind that you do not need to spend a lot of money to let someone know how much they mean to you. Many people have turned to making homemade gifts such as fudge, chocolate truffles, cake in a jar, etc. You can dress up each of your homemade gifts with ribbons and bows.

Another good reason to make your list now is that you can watch for sales over the next 9 months and pick-up items when you find them for a good price.

The same goes for decorations, baking supplies and groceries.

Perhaps you have all the decorations you need to decorate your home, but you may need more wrapping paper or scotch tape. While some of these items may not be in the stores right now, as soon as they are, watch for sales. Another good tip, that is often overlooked, is to purchase wrapping paper, bows and cards at the Dollar Store. Their selection is typically huge, very good quality, and their prices are extremely low.

If you enjoy baking Christmas goodies, especially if you do decide to make some gifts, begin looking for specials on flour, sugar and other ingredients in August or September and stock up your pantry.

Look for ways to spend less on Christmas.

I’ve known many people that have said “If I start shopping too early I just end up spending twice as much”. I did years ago as well. But I find that if you create a good cash only Christmas plan and constantly remind yourself of your plan, you will in fact stick to your plan, and you will only spend what your budget allows. You will be more relaxed during the holidays and you will also feel a sense of relief in January knowing that you won’t be receiving all kinds of bills in the mail.

How much money do you need to set aside for a cash only Christmas?



    • WorkSaveLive

      WorkSaveLive 03/01/2012 10:16 a.m. #

      Love the post! I've been saving for Christmas since January!

      We set a limit on what we're going to spend, divide the TOTAL number of expected expense by 12 and then we save that amount every month.'re ready when Christmas comes.

    • Emily @ evolvingPF

      Emily @ evolvingPF 03/01/2012 5 p.m. #

      Wow, what a great list!

      We paid cash for our Christmas gifts last year (post in my link) by setting up some spending limits for various degrees of family members - we had greatly overspend the previous year! The limit is $50 per immediate family member and $10 per extended family member. We started thinking of what to buy in October. We save at a certain rate for Christmas each month, but into an account that we use for other gifts and travel expenses so it's just an estimate. With the limits we put in place last year, we should be able to separate out the Christmas money into its own account - thanks for reminding me!

      I like your suggestion of buying things throughout the year as they go on sale. I don't think it would work for a couple reasons in our situation, but maybe once we move back to CA and don't have to ship the gifts we can start implementing that.

      I also like the suggestion of looking for ways to earn extra money. I think there is a greater incentive for trying to make a bit of extra money when you have a very specific (and fun!) purpose for the money.

    • Aloysa @ My Broken Coin

      Aloysa @ My Broken Coin 03/01/2012 9:34 p.m. #

      Honestly, it is never too early or too late to plan cash only Christmas. In fact, the earlier the better because it will give you more time to save. However, estimating Christmas expenses might be hard because there is always something that comes up the very last minute.

    • Dave @ Gen Y Finances

      Dave @ Gen Y Finances 03/03/2012 6:22 a.m. #

      This is a really good idea. I hate to admit it, but I am usually one of the people scrambling in November/December buying things for Christmas and not realizing how much it is going to cost me!

    • Dustin @ Financial Knowledge

      Dustin @ Financial Knowledge 03/03/2012 3:27 p.m. #

      I actually save money from each paycheck specifically for Christmas. Even then, last year we spent more than we saved. That is NOT going to happen this year!

    • Jeff

      Jeff 03/08/2012 5:53 p.m. #

      I feel like I over spent on Chistmas. My boys have to much stuff and we keep over spending on them. We always do a cash christmas but tend to wait till September before we start saving. I think, now anyways, that if it's February and you haven't started saving then it's a little late.

    • Tackling Our Debt

      Tackling Our Debt 03/08/2012 6:18 p.m. #

      It is easy to overspend at Christmas. But good for you for putting yourself in a position to be able to do a cash only Christmas.

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