5 Strategies for Saving Money for Christmas 2020
Christmas can be a very stressful time of year. Between the amount of money that you think you need to spend on presents, your additional food costs, baking costs (if you still do your own baking), and travel costs (in Canada, it always costs to travel, whether it be by car, train or plane). That is why we recommend that you set up your Xmas budget for December of 2020 on January 1, 2020. In this way, you can anticipate any unforeseen costs but also prevent yourself from going over budget because your purchasing will be strategic.
The best place to start is to set up a tax-free savings account (TFSA) for your Christmas spending needs. You can do this at any banking institution in Canada. But ensure you make monthly contributions to it, and make certain that you know in advance how to access the funds when you need them. Some banks don’t allow you to access the funds online; instead they require you to make deposits and withdrawals from it in person. Also, the annual contribution for 2020 is a maximum of $6000. If you withdraw funds from your TFSA, do not repay them in the same calendar year, or you may be penalized by being charged tax on any contribution over $6000/calendar year.
Next, how much do you want Christmas 2020 to cost you in total? There are a few questions that you need to ask yourself. Plan in advance, what your gift giving budget will be. Do you plan on spending $50 on 6 people and maybe $100 on your partner/spouse? Don’t forget to include the cost of any office party, Secret Santa gifts or gift exchanges that you are normally a part of. Come up with a realistic total for this cost line. As a guide, the average Canadian, according to Price Waterhouse Cooper, spends approximately $1500 on all their overall yearly Christmas expenses.
Next, plan your menu for the next Christmas in January. Figure out how much you think you will need in the way of foodstuff and cost it out. Be sure to add a cushion because food prices can go up throughout the year. We recommend that you buy things with a long shelf life when they go on sale throughout the year.
As for baking, some people still do their own baking, and this can add up to a significant part of your food budget. So plan in advance how many batches of shortbread, fruit cake, and almond bark, etc., that you will make for Christmas 2020. Don’t forget to cost out these items and again build in a cushion because you don’t know what could go up in price before next Christmas. Some of these items can also be purchased when they go on sale and you can just pop them in your freezer, within a reasonable time period before Christmas.
Lastly, in Canada, it is always necessary to travel. Some people only have to travel 100 miles by car, while others will travel thousands of miles by train or plane. Whatever your Christmas travel arrangements are, plan them now. Be sure to monitor plane travel costs and look for seat sales throughout the year. That way, you can put aside the money needed to travel and not be charging it on your credit card at the last minute, with not enough resources in your bank account to pay it off in January of 2021. Gas always seems to go up in price at Christmas time, so make sure that you budget enough for gas money for your travel arrangements.
Once you have all these lines totalled. Divide it by 11. You don’t want to have to put money into your Christmas budget in December. That will give you the total amount of money that you need to set aside in savings every month for Christmas 2020 to be Merry and Bright for you and your family.
Have a Merry Christmas, Happy Holidays and Happy Hanukah and go forth and save.
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