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cash only Christmas

How to Save for a Cash-Only Christmas

Are you ready to save money for a cash-only Christmas this year? Then I’m so glad that you are reading this article now so that you can plan ahead and save throughout the next year for a fret-free, debt-free Christmas!

Because like clockwork, Christmas is going to be here again in December. And before you know it, the holiday bustle will be upon us once again. But this year, you will have one less thing to stress about because your Christmas will already be paid for. No more still paying on your credit-card Christmas next November!

Tip: Save the image above to Pinterest so that you can easily refer to this article on how to save money on Christmas later!


Why Have a Cash-Only Christmas This Year?

If you have never saved money for a debt-free, cash-only Christmas before, you may wonder what the big deal is. Well, for one thing, the less debt you have, the more control you have over what one financial expert calls your greatest wealth-building tool—your income. For another, if you know that you have already planned to save for Christmas, you won’t have the stress and that guilty tug in the back of your mind that comes from knowing that you are spending money that you don’t have.

And finally, by planning for a cash-only Christmas you will have a set amount that you will know is available to spend and so you can tell yourself no when you see just one more thing that catches your eye. Knowing exactly how much you have to spend, rather than just winging it, will keep you from overspending and using money that perhaps should have been used for other things or toward your financial goals.



Plan Your Cash-Only Christmas

So now that we have talked a little about the why behind a cash-only Christmas, let’s talk about the how. Fortunately, saving for a debt-free Christmas really is simple. And even more, it’s pretty easy, too! (Because not all things that are simple are easy—leaving a moist piece of delicious chocolate cake on the table is simple, but it sure isn’t always easy!) Here are five simple steps to follow to accomplish your cash-only Christmas.


1. Set a Christmas budget in order to accomplish your cash-only Christmas.

First, as you plan for your cash-only Christmas, decide how much you want to save. Of course $1,000 is a nice round number, but you don’t have to spend that much. I don’t think we have ever spent more than $300 on Christmas.

If you know how much you spent for Christmas last year, then you can use that as a guideline for how much to spend this year.

Don’t have a monthly budget set up yet? Learn the simple steps for how to make a budget and how to stick to it!

2. Decide how much to save each month.

So once you know how much you would like to spend for your cash-only Christmas, you can figure out how much to save each month. So if you want to save $1,000 for Christmas this year and you started saving in July, then you would need to save about $160 per month.

Or let’s say that you are working hard to reach other financial goals, and so you are happy to have a little bit less expensive Christmas. If you want to save $500 for Christmas, then you would need to save $80 per month. Or if you are trying to get out of debt, for example, you could really trim things down, and spend $250. You can still have a wonderful Christmas for $250! And that would be just $40 per month. Forty dollars per month is pretty doable in most people’s budgets, if it’s something they set as a priority.

Note: Do you have a tight budget? Check out these ideas to increase your income!

Of course, if you want to spend somewhere in between that, then you could save $60 each month and have about $350 to spend on your cash-only Christmas this year.


3. Open a Christmas savings account to save for your cash-only Christmas.

To have a specific place to save for your cash-only Christmas, open a savings account specifically for that purpose. If your bank or credit union doesn’t allow you to set up multiple savings accounts or doesn’t offer very good interest rates on savings accounts, look into an online bank like Capital One 360. We’ve been banking with them for 14 years (from the time when they were still ING Direct), and they’ve been a great bank for us (despite my reservations when Capital One bought them). One of the things that I love about my Cap One 360 account is that you can have multiple savings accounts for your various savings goals (we have more than 10 savings accounts!). And one of those is our Christmas and gift giving savings fund. They also have one of the better interest rates around.

Learn about the 9 savings accounts that I think every family should have. And learn about the power of saving for large expenses with sinking funds to help you get and stay out of debt!


4. Find areas where you can save to fund your cash-only Christmas.

Even though $40 to $160 a month isn’t a huge amount, given the fact that most Americans live paycheck to paycheck, it might still be difficult to find it in your family budget. (Haven’t started budgeting yet? Let’s change that this year! Download your free spending tracker and simple starter budget!)

So here are ideas for places where you can trim your budget to fund your Christmas savings account as well as other savings accounts while you’re at it! Top areas where you can likely reduce your spending include (click the links below to read more about each area):

Want even more ideas for how to spend less? Check out 20+ ideas for how to reduce your spending in various areas.


Check out these related articles:

9 Savings Accounts Every Family Should Have
21 Must-Know Tips to Help You Spend Less Money
7 Simple Steps to Create Your Emergency Fund


5. Set up automatic transfers to fund your Christmas savings account.

One way to ensure that you save like you want to in order to accomplish your cash-only Christmas this year is to automate your finances. That way you can essentially set it and forget it—you can determine how much you want to save each month based on your overall budget, set up automatic transfers from your checking account to your Christmas savings account, and then not think about it again until the Christmas shopping season begins later this year!

If you haven’t automated your finances yet, you’re missing out! So let’s change that. Set up automatic transfers to take money from your checking account to your Christmas savings account. You could set up the transfers to correspond to your paychecks, or just set up a monthly transfer on a certain day of the month.

And while you’re at it, if you haven’t set up automatic savings plans for other budget categories, you should. By automating your finances you can set yourself up for financial success by saving for emergencies, saving up for large expenses such as car repairs and home repairs, investing for retirement, and more.

Learn more about how to automate your finances to set yourself up for financial success.



By following these 5 simple steps, you will be able to enjoy your cash-only Christmas this year! Now all that’s left to do is to relax until you’re ready to begin your Christmas shopping. Go you!

Also check out this article with 11 must-do tips to save money on your Christmas shopping.


Are you ready to commit to a cash-only Christmas? How much do you normally spend on Christmas? Do you feel that that is a reasonable amount, or do you want to decrease or increase that amount? Leave a comment below to share your thoughts. I’d love to hear your opinion!


Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help a family member or friend or people in general? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being with others. Thank you!

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