Why Not Save for Christmas in July?

July 25, is known as Christmas in July. The retail calendar does not always match our own and people tend to remark when they see Halloween decorations in the summer or swimsuits on sail in the winter. And some retailers try to entice shoppers to spend more for Christmas in July. But rather than being enticed to spend, you could use Christmas in July as an opportunity to think ahead and save for the winter holidays.

While it is important to save for a general emergency fund, some people find it is easier to save with a specific goal in mind rather than just save in general. Smartasset.com offers some tips to start saving for the winter holidays in July. If you have thought about doing this is in the past and haven’t managed it before, it is not too late to start this year. By the end of the year, you may feel at ease to spend on gifts or experiences like vacations.

Separate your savings. One thing the site suggests is that you keep your holiday savings separate from your general savings. You will not want to dip into your overall emergency savings as you spend for the holidays.

Some people need to set up an automatic transfer to save while others can do it themselves. You can do this on your own through a Christmas Club account at some financial institutions. Or you can do the transfers on your own into an account that you designate specially for the holidays.

For those who don’t mind keeping track on their own, Smartasset.com recommends rounding up each debit card purchase and saving the difference, as well as saving loose change.

Find ways to reward yourself. Instead of using credit card rewards to justify overspending at Christmas, try spending earlier in the year with a rewards credit card with an aim to trading in points for gifts during the holidays:

“Just keep in mind that if you’re going to try your hand at the rewards game you should only charge what you can afford to pay off in full each month. It’s not worth it to pay interest just for the sake of scoring a few extra points.”

©Bring Clarity to Your Finances™. Why Not Save for Christmas in July? is a post from Bring Clarity to Your Finances™

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Claire Emory, MBA, CFA, CFP®

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