The Benefits of Saving Up Money for Christmas

This year I did something I’ve never done before. Early in the year I opened up a SmartyPig account to save for my Christmas Expenses. Every month I had a set amount of money automatically withdrawn into my SmartyPig account. I never missed it, because I never saw the money.

Though I used SmartyPig, you could use an Capital One 360 Savings Sub-Account or even a savings account at your local bank or credit union.

Now that I’ve saved for almost a year, I’m reaping the benefits of stashing my money away.

I Won’t Have Credit Cards to Pay off in January

All my Christmas presents have been bought, save for a couple of things for my parents and in-laws. I already know what I’m getting them though, so it’s just a matter of picking them up. I have the money in my bank account to pick up the gifts, so I’m not worried about affording their presents.

I Avoided the Danger of Overspending

By saving a set amount for Christmas, I know exactly how much I have to spend. I’ve already made a commitment to stick to my Christmas budget, so when I’m shopping, I avoid the temptation of buying something on a whim.

Furthermore, I avoid the attitude of “well, I’m already going into debt….what’s 10 more dollars?” The reason I know about that attitude is I’ve been there. This year if I go over budget, I’ll be going into debt. Although that would be pretty difficult, since I cut up my credit cards.

I Was Able to Shop Early and Plan my Gifts Carefully

I was more intentional about the gifts I bought this year. Since I didn’t want a bunch of clutter in my house, I decided not to buy a bunch of little things that would get stuffed into corners. I figure the grandparents will take care of that.

Instead, I went for a big family gift: a Nintendo Wii. (Shhhh! Don’t tell the kids!) I figure this is something we can all enjoy together. And since I was deliberate in my saving and planning, I was able to pick one up at Target a month ago. I won’t be standing in line in the wee hours of the cold morning to try to get one of 10 available at Toys R Us the day after Thanksgiving. (I don’t know if Toys R Us is even advertising a Wii on Black Friday, but you get the picture.)

My Christmas Season is Going to Be Stress-Free

Maybe it won’t be stress-FREE, but it will be a low stress Christmas for sure. I don’t have to fight the crowds. I’m not worried about money. I plan on spending lots of time baking with the kids, listening to Christmas music…in my home and NOT in the stores…, and watching all the old Christmas TV specials with my family.

If you’ve never tried to save money for Christmas throughout the year, I highly recommend it! But if it’s too late for you this year, plan a frugal Christmas for this year, and start saving for next Christmas in January.

If you need some ideas to make your Christmas a frugal one, check out the following articles:

Do you have a plan for Christmas spending?


By , on Nov 17, 2008
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.


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  1. It is so nice to start the new year off and not have to pay for Christmas presents for the next few months! A cash Christmas is the way to go!

  2. This is a great thing to promote. We’re also having a cash Christmas for the second year and it’s worth it. We try to emphasize what the holiday means and really focus on that and it’s so much nicer.

  3. Zach Younkin:

    Way to go!

    Although I won’t exactly call my spending frugal this year, I did end up spending a lot less than I was expecting to spend!

  4. Jb:

    Excellent work! I’ve actually got savings accounts set up for all of my “fun” things: travel, a new tv, and so on. I fund it with insurance benefits refunds, that way I don’t miss the money because it was already budgeted for & spent, and then I save up for things. I tend to buy Xmas presents year-round, whenever I see something I like for someone. This year I got everybody for less than $50, which is great! Besides, for me, Christmas is more about getting together with family & eating food rather than the exchanging of presents. :-)

  5. Sammy:

    I am with you on this one! Who wants to start the new year worrying about the previous year’s debt!

  6. Since I have only one child, I shopped for him at take PayPal!!
    My PayPal pulled the money out of my checking account. So Santa shopping is done and paid for and I am one happy mama!!!

  7. We totally, only pay with cash we have. If we have to go to a credit…well…no gift, etc..then. Only twice have we had anything on a credit card that I can remember for Christmas…and that is husband’s ideas both because he wanted to get me a nice necklace one year and this laptop a different year. Can’t fault him for that. Love them both! :-)

    Lynnae, just wanted you to know you have an award if you get a chance to take a look:
    No follow up necessary…only if you want and have time.


  8. You are my hero…*sigh*

  9. marci:

    Ain’t it great! That feeling of being done!
    No stress, time to relax and enjoy, no fighting the crowds! And no credit card bills!

    I shop all year long and stash away. This weekend, I sorted and wrapped. I have one package to mail off today, and I am done done done! I will have to admit tho that I am usually done in Sept… but this year I wasn’t done until the 2nd week in October – which is late for me!

    Now – enjoy the holidays! Yes!
    My one splurge was two large prepackaged everything included sugar cookie boxed with decorations mixes at Costco – about $8 each – One for each of the grandkids’ locations. I’ll have Christmas cookie baking time in Albany with those 4 and in Tillamook with these 4 :) Special time, for little cash. Great memories – that’s what this season should be about – the time together – not the hassle of shopping!

  10. That’s what I’m talking about. I hope you encouraged family to do the same and if they cannot limit shopping to cash, not to buy you anything.

  11. Frank Costello:

    Paying cash makes me more thoughtful when buying a gift…”will this person really use and enjoy this?”

  12. vilkri:

    Well done. I checked out SmartyPig. What a great idea. Thanks for alerting me to it!

  13. I plan a cash only Christmas but haven’t started shopping yet. For some reason I just don’t have any desire to run out to the stores.

    Today I’m writing my list and hopefully will have everything finished by the end of November.

  14. I did the same thing this year and posted about it last week. It’s so nice to have my shopping done and not have to worry about fighting crowds, not finding gifts, etc.

    I’ll be starting my new Christmas account with the first check in January!

  15. Amy:

    That is so great. I am actually looking forward to the holidays a lot. This year one side of the family is just exchanging names so we don’t have to buy for everyone. For the other sides, we are doing a charitable donation to a local charity instead of buying gifts for one another. I also did some side jobs to earn our holiday money this year which will definitely help so it doesn’t eat into the family budget.

    Great discussion!

  16. Christine:

    I’m doing the same thing this year. My parents are buying the Wii for our 4 kids, and another small gift. My husband and I are paying for everything in cash this year, and even before black Friday we have half of our Christmas shopping done. I’m so glad I won’t owe a soul a cent when this Christmas shopping is over, and that alone is a huge gift to me this year.

  17. Dawn:

    I started doing the same thing a few years ago. I just wrote about it and what a relief it is to me to not have to worry about money this holiday season. I am using a credit card for some online bargains, but then immediately setting up a bill pay online for that exact amount. That way I don’t accumulate any debt.

  18. What a great feeling! I’m happy that I’ll be having a cash-only Christmas as well. It’s my first one. :)

  19. fortunately, i had a lot more income from my photography business this fall, so that became my savings plan. i have been able to buy a new (okay, refurbished) iMac and will have the cash to get all our presents. i will also be able to throw some money toward our shrinking debt. i’m so happy about not having to put everything on credit cards this year. and i’m also happy that several of our relatives are all about scaling back this year. that makes a big difference in my stress level.

  20. Way to go!

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