Want to Save $500 For Christmas? Put Away $38.50 Every Week, Starting Now

christmas shopping
Yulia Petrova under Creative Commons

The countdown to Christmas has begun. How are you going to keep your holiday spending under control? With a weekly savings plan.

Here’s what you need to know: There are 13 weeks between now and Christmas Day. If you save $38.50 every week, you’ll have $500.50 set aside for holiday spending.

We got this idea from MoneyTalksNews, and it’s a great way to make sure you have the cash you need to fund your holiday.

Make a Savings Plan That Works For You

Many of you are probably thinking one of two things:

  1. I can’t wait until Christmas week to buy everything I need for the holidays!
  2. I spend much more than $500 on Christmas!

In both cases, you’d be right.

It’s often much more cost-effective to buy — or make — your holiday gifts ahead of schedule. Some people even begin their holiday shopping in January to take advantage of those post-Christmas discounts.

Likewise, the average family planned to spend $861 on holiday gifts in 2014, according to the American Research Group. That doesn’t include additional holiday costs like travel, food and pictures on Santa’s lap.

But that doesn’t mean you can’t make this savings plan work for you. If you want to save $861 instead of $500, you’ll need to put away $66.25 every week.

And when you see that holiday deal you just can’t pass up, use the money you’ve been saving every week to buy it.

Don’t Charge Christmas

Think it’s easier to just put Christmas on a credit card? It’ll cost you. As MoneyTalksNews explains:

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.

So open up a sub-savings account and start decking its halls with money.

When the holidays are over, keep the account open. After all, there’ll be 52 weeks until Christmas 2016 — and if you put away just $9.62 a week, you’ll have $500 saved by Christmas.

Want to learn more? Read the full story at MoneyTalksNews.

Your Turn: How do you save for the holidays? Do you think this weekly savings plan would work for you?

Nicole Dieker is a freelance writer focusing on personal finance and personal stories. Her work has appeared in The Billfold, The Toast, Yearbook Office, The Write Life and Boing Boing.

The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.