The 2024 Holiday Season is only 4 months away! If you haven’t started planning, now is the time. Especially if you want to start off the New Year with NO Holiday debt.
If you’re a nurse or mom who’s in charge of making all the Christmas magic for your kids, planning ahead with Holiday sinking funds is the best way to keep your Christmas full of joy and debt-free.
What Are Sinking Funds?
Sinking funds are savings accounts that are dedicated for very specific expenses. Unlike one big savings account that you might use for emergencies, sinking funds are targeted and have a clear purpose and goal.
With sinking funds, you save slowly throughout the year, or over a specific period of time, to have money readily available for expenses you know are coming up, like the 2024 Holidays.
The Benefits of Sinking Funds
- Targeted Savings – Instead of throwing all of your extra money each month into a big savings account, you are dedicating more of your money towards specific things with smaller, targeted savings funds.
- Budgeting Ease – This helps you plan ahead for every single expense you know is coming, so you are not strapped for cash when Christmas and Summer Vacation come around.
- Stress Reduction – No more last-minute scrambles for cash during the holidays. You’ll feel prepared and ready to go with a big chunk of money ready once December rolls around.
Setting Up Your Sinking Funds
Creating sinking funds is simple. Follow these steps to get started:
- Identify Your Goals – Determine what you need to save for this year, such as gifts, decorations, and travel.
- Estimate Costs – Calculate the total amount of money that you will need to build each of your sinking funds.
Some examples of sinking funds might be:
-New Christmas Tree: $200
-Holiday 2024 Expenses: $500
-Car Repair Funds: $2000
-Summer Vacation Savings: $1000
- Divide and Conquer – Now simply break down the amount you need for your Christmas sinking fund into monthly savings goals.
How do you know how much money to save for each of your sinking funds?
Check last years budget if you have one, and see how much you spent on the item.
This is another reason why digital budget apps are so amazing. Instead of keeping track of loose papers, you can look back on all of your previous budgets to see your progress and see exactly how much you have spent on each thing over the years to help you estimate your future expenses
If you have absolutely no idea how much to dedicate to your sinking fund for Christmas this year, here’s some steps on how to figure this out and make your best guess:
Step 1: Identify Your Goals for your 2024 Holiday Sinking Fund, and break down all of the purchases that will go into this fund
For the Holiday 2024 Sinking Fund, think about all of the different holiday expenses that you typically have during this season.
Review your previous budgets. Think also about any additional expenses you might be taking on this year.
Are you wanting to spend more on family activities around the Holidays?
Are you taking a mini holiday vacation or getaway this year?
Will you be hosting Christmas dinner and need to spend more on food and party planning expenses?
Your Christmas Sinking Fund Expenses Could Include:
- Gifts for family, friends, and coworkers
- Holiday meals and baking
- Holiday Travel/vacation expenses
- Holiday decorations: new Christmas tree, Christmas lights, etc.
Step 2: Estimate Costs for Each Planned Expense in Your 2024 Holiday Sinking Fund
Once you’ve identified all of the things that you want to be included in your Christmas sinking fund, then you need to estimate and plan how much you are going to spend on each thing
Here’s an example of what this might look like:
- Gifts for family, friends, and coworkers: $500
- Holiday meals and baking: $200
- Holiday Travel/vacation expenses: $300
- Holiday decorations: new Christmas tree, Christmas lights, etc.: $100
Total: $1100
Step 3: Divide and Conquer To Add Money to Your 2024 Holiday Sinking Fund to Be Prepared for Christmas
In the example above, if you needed to save an extra $1100 for your 2024 Holiday Sinking Fund, and you started in August 2024, you would need to save $275 per month over the next 4 months to have $1100 by the end of November 2024.
If you started 12 months in advance, and saved starting in December 2024 for Christmas 2025, you would only need to save $92 per month in this sinking fund to have $1100 ready by December 2025!
When you break down the amounts and look at it that way, it seems much more realistic and achievable.
Saving in advance for Christmas can help keep you on budget, out of debt, and prepared for every possibly expense that might come up during this time.
Creative Ways to Add Money to Your Holiday 2024 Sinking Funds
The earlier you plan and start saving, the easier it will be. If you haven’t started to save for Christmas yet, don’t worry, you can still do this in 4 months and build up a sinking fund just in time.
Side Gigs
Side hustles can be a great way to earn extra money when you aren’t making quite enough to fill your sinking funds and achieve your savings goals with your regular job and bills.
Some side hustles to try to make extra money for Holiday expenses:
-Freelancing
-Babysitting
-Errands/small jobs for family/friends/neighbors
-Pet Sitting/House Sitting
-Selling handmade items
-Declutter and have a yard sale
-Sell unused items around your home, or clothes that are too small
Remember small amounts really do add up over time, and every amount of money will add up and get you closer to your goal
Credit Card Cash Back Rewards
You can use credit cards to earn bonuses and earn cash back, for FREE.
Work smarter not harder, and make money by using a credit card to pay your regular bills each month.
You can also try opening up a new credit card, which can come with bonuses. If you have a good credit score, this can be a great option.
Make sure you research the BEST credit card and highest bonus available. Make your every day purchases as usual, and slowly watch your cash back rewards build.
You might want to avoid this option if you have trouble with overspending on credit cards. Stay diligent with budgeting and tracking every expense that you put on your credit card.
Tips for Sticking to a Budget During the 2024 Holidays
Once The 2024 Holiday Season arrives and you now have a fully funded sinking fund ready to spend, you want to make sure you are maximizing your money and staying in budget for each category listed in your sinking fund.
Here’s some tips to stay on budget and stretch your dollars during the Christmas season:
Seasonal Sales
Save with black Friday and cyber Monday sales
Sign up for store credit cards to get a big discount
Sign up for email and text marketing for coupons
Create a Holiday 2024 Budget
Create a separate budget for November/December that is JUST for holiday expenses!
Keep track of all of your gift spending, holiday food spending, and holiday decor expenses.
Set a specific dollar amount of everything that you are planning to spend on during the holidays and DON’T go over budget!
Track Your Spending
This is essential to make sure you aren’t going over your expenses. Especially if you are using a credit card, it can be so easy to swipe your card and forget about your spending.
Check your bank account/credit card statement daily, review your expenses, & update your budget and spending tracker daily
It might be easier to use cash envelopes to have a better visualization of what you are spending on for each item during the holidays.
Shop Early for Holiday Gifts
Starting early is key! It can be easier to spend more when you are rushed.
Take your time, research the best prices on every item you want to buy and take advantage of special discounts.
Don’t forget about researching those special discounts for First Responders, Teachers, & Nurses!
Alternative Ways to Celebrate and Give Gifts for Christmas
What if you can’t save enough money in time for Christmas, or your holiday budget is smaller than you anticipated?
Remember the Holidays are not about how much money you spend, but instead about the memories made with your loved ones, friends, and co-workers.
You don’t have to spend a fortune and absolutely do NOT need to go into debt to have a great Holiday 2024 season
Homemade Gifts
Homemade gifts can be so much more special than store bought ones anyways!
-picture frames
-photo albums
-cookies/treats
-Use your crafting skills and DIY skills to make something special for someone
-ornaments to hang on the Christmas tree each year
Experience Gifts
Experience gifts can sometimes be pricey, but you can try to search for experience gifts that are within your budget.
Think less Taylor Swift tickets, and more like:
Movie tickets
Gift cards to someone’s favorite restaurant or store
Music lessons
Secret Santa: not just for work
Instead of everyone getting gifts for each other, which can really add up, try organizing a secret Santa for exchanging gifts with family and friends
Each person draws a name, and only has to buy a gift for one person for a specific dollar amount.
This can really keep the focus on the experience of spending times with loved ones, instead of spending on everyone and the cost for gifts getting out of control.
Wrap-Up Thoughts
Planning ahead with sinking funds can make your Holiday 2024 season stress-free, debt-free, and so much more enjoyable.
Start your Holiday 2024 Sinking Fund NOW to be ready for this Christmas and stay our of of Holiday Debt.
Leave a comment below about how you are going to stay on budget this year for Christmas, and how much money is going in your 2024 Holiday Sinking Fund!
