Christmas in July

One of our Sorted team was telling me about a midwinter party she attended last week, where people brought gifts for each other (these had to be under $10) and toasted each other with mulled wine. Although it’s never been our tradition at home, it sounded brilliant, a likely antidote to the midwinter blues.

Of course, it brought to mind that the real Christmas will come around soon enough, when the days will certainly be longer – hopefully much warmer – and the presents will most likely run much higher than ten dollars. What sort of holidays will we have this year?

Let me declare it publicly: we have now officially entered planning season for the holidays. We’re at X minus six months and counting!

Now there are many planner-types out there who are more than aware of this – they’re the people who have got it so together that they book ferry rides to the South Island months ahead of time (now’s good). They’re the people who have already reserved their favourite campsites far in advance. Kudos to them.

But what if you’re not the planning type?

Take heart – it doesn’t come easy to me either. The thing to keep in mind is that our financial struggles develop our money strengths.

Saving from now, in the run-up to the big spend, will be the cheapest way to go (and help us avoid any dumb debt early next year), so we need to see how much we can set aside each week.

Hang a target to hit

Let’s start with setting a goal, a target to shoot for. If you had to fill out the following sentence, what number would you put?

‘I will have $x for the holidays by 15 December.’

Of course, I could pull a number out of thin air and, say, put down $500,000 for me, but the number needs to be realistic and achievable. (And I wouldn’t want to spend half a mil on the holidays if I had it anyway.) Many of us could use the equivalent of an extra pay around that time of year, but even smaller amounts can be a big help with travel, gift and entertainment money for the holidays.

Working backwards

Now, with the number you’ve hung as a target for you and the whānau, you can figure out how much to set aside each week. (We’ve got the perfect tool for all of this, by the way: Sorted’s savings calculator.) Here are some examples of amounts to be saving.

So that’s how much you need to be putting into an interest-bearing account each week to reach your goal. These days accounts take all of ten minutes to set up online. Pay yourself first, make it automatic, make it happen.

No spare cash?

What if it seems like you don’t ever have any money to save? I’ve certainly been there – where entire pay cheques vanish almost immediately after each payday to cover the bills. Or worse: sliding backwards into debt, digging my way out each month, only to slip back all over again. (Some of us are still paying for last Christmas…)

The truth is, though, that if you’ve got income coming in, that money is going somewhere. And it literally pays to crunch the numbers and see where it’s going. (Need help? Call 0508 BUDGET.)

Take a hard look at your account history and credit card statements. How much is going towards alcohol, cafés, music or movies? It may be more than you think, and it may not be what you really want to be happening.

If it’s not – why not make a change and put it towards the holidays instead?

May your money plan for the holidays come into focus quickly and take hold. And come this Christmas, you’ll look back at what a gift to yourself it was to get started way back in July.