Holiday Gift Fund: It’s Never too Early to Start

A couple of weeks ago Frugal Dad reminded us that there are less than 200 days to save money for gifts this holiday season. We have never had a holiday fund, but we have always been able to pay cash for any presents we buy for the season. This year I want that to be different. This year I want to have a holiday gift fund and accumulate that money with as little impact to our budget as possible.

First, let’s analyze our needs. Let’s go over my husband’s side of the family: we need to buy presents for his parents ($75), and his three nephews and niece ($25 each). We have an agreement we don’t gift the adults but the children. This same applies for my family, present for my mom, already bought for $4 at CVS this week, gift for 7 nephews and nieces ($140). Then gifts for husband’s coworkers 6 of them at $10 each=$60. Gifts for friends’ kids: $80, four of them 20 each. Oh wait! I forgot gifts for our kids: $50 each and just for the heck of it $50 for presents for each other. The grand total I need is: $630. Because spending during holiday season usually tends to become inflated, for good measure I will pad our fund an extra 15% and set my target at $720. This is what I need to save over the next twenty weeks. It comes out to $35 a week. That’s not chump change now that I think about it.

Now, how am I going to get there? First, any money I get back from rebates or surveys will get saved for this purpose. Right now I have $15 in rebate checks I need to cash. I have other $25 already cashed. But mainly what I will do is withdraw $35 in cash right after my husband gets paid. That way the money is already deducted from our budget and we need to adjust our spending accordingly. This is my archaic version of automatic savings.

I will be putting the money away in cash in an envelope. I also intend to purchase gifts from now until then to take advantage of sales and clearances. I will save those receipts so that at the end of this period I can see how my plan worked out.
How about you? can you draw a quick holiday gift budget in your head? Can you plan where the money is going to come from? How about start saving now to lessen the blow later?

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  • kim

    x-mas shopping/saving starts a few days after new years for me. I shop all year round for deals and bargains. For example in january 08 I bought (14) x-mas tealight tart candle holders origionally $15 but I paid $1 each. I will make a gift bag add tea lights 2 cinn tarts or pine tarts(also bought on clearance) and to top it off i got 15 free gift bags from cvs a few months ago. For under $2.50 each I will have created teachers gifts, auntie gifts, a few neighbor gifts and I always have a few just in case gifts. I have three kids and I try to get a few of their gifts early to but my main focus at x-mas time is my kids, I try to have everyone else done by november.

  • Jackie

    I love this reminder! I was just thinking this same thing the other day, and then it quickly slipped out of my mind. I am going to start a little savings fund now of $20-30 each week. That should help alot! In addition to watching for the sales at grocery stores… I’m going to start watching the sales at toy stores!

  • Frugal Dad

    Thanks for the mention! I think saving up throughout the year is a great plan, and something we are on schedule to pull off this year. Your point about purchasing sale items starting a few months out made me think of a flaw in our plan. All the money is currently locked away in a savings account. Perhaps we can move a little into checking and hang on to the receipts to make sure we don’t spend more than we’ve withdrawn. Great idea!

  • Mercedes

    Hi Kim, Last year I was able to get some gifts for my sons babysitters with a sale target had. I am hoping for something similar this year. or I was thinking of putting together a “spa” bag with HBA items I have gotten for free at either Walgreens or CVS. I also have some of those free eob bags, lol!

    I hear towards the end of the summer is a great time for toy clearances. I am looking forward to those. I have more than 10 kids to buy for.

    Frugal Dad, thank you for stopping by. I just wanted to suggest that if you find something on sale and buy it, you “pay yourself back” with the money you have in your savings account. That’s probably what I will do. I know that if I put money from this fund into the checking account, soon it will get used for another purpose.

  • Marcy

    I have a spreadsheet for our Christmas budget that I review and update every year. It helps me keep track of how much I am spending, who I have gifts for, who I still need gifts for etc… We are fortunate that DH gets his annual bonus in November, and that we know what the amount will be in June. We always set aside a portion of it to buy Christmas gifts. If for some reason his bonus goes away or is a lot less, at least we’ll know about it 6 months before Christmas and can plan accordingly. Great post. I just started thinking about Christmas gifts this week.

  • kim

    I was at my local Target and they were clearancing tons of toys 30-50% off. I got a few goodies for xmas but i stocked up on bday presents for my sons(7 yrs and 6 yrs) friends bday parties. I got quite a few things for my daughters second bday as well. I was bummed i couldnt use the target coupon but I did great even without it

  • Beth

    Every year my goal is to have 90% of my shopping done my Sept. All year long I am on the look out for a good deal. I even go so far as to buy items, that I have no idea who I will give them to. Because the item is nice and on sale.