Starting Budgeting For Your Christmas Envelope

“Wait, what?  Ryan, are you talking about Christmas already?  It is only March!  Let’s get to Spring Break before we start seeing Christmas decorations in the stores!”

I know, I know.  It may seem too early to talk about Christmas and think about buying presents.  But here is the truth.  Unless you are a planner and a saver, a large majority of people don't save up for Christmas, special occasions, or essential items.  When November or December rolls around, we often find ourselves caught off guard and surprised that Christmas is just around the corner.  The result?  We end up buying those presents on a credit card, which only adds to our debt.  It's not a good way to start the next year. But imagine the relief of not being caught off guard, of having the funds ready when Christmas arrives. That's the power of planning and saving early.

Suggestion: Start a Christmas Envelope.  What is it?

If you listen to the Ramsey Network, Dave Ramsey and his personalities talk about an “envelope system”.  The envelope system is a budgeting method that involves putting cash into labeled envelopes for each spending category. The system helps you track your spending and avoid overspending. It's a simple yet effective way to manage your finances, providing a clear visual of your budget and preventing overspending.  I love the envelope systems, especially when you need to save up for those yearly subscriptions, insurance plans, or other purchases.  Here is how it works:

First, consider who you want to buy presents for and your limit amount.  Then, divide that total amount by the number of months.  You can divide it by the number of paychecks paid bi-weekly or weekly.  

How does budgeting it work?

For example.  If my target goal is $1,200 for Christmas 2025, I must save $100 for my Christmas envelope.  If I use the envelope funds early because I saw a present, I have the money to buy it.  By Christmas 2025, I have saved up $1,200.  Once 2026 comes around, I will start saving for Christmas 2026.  

When starting the envelope system, Krystal and I would use physical cash.  Going to the bank or ATM was a drag to withdraw the money, place it in a physical or paper envelope, and make transactions using cash.  However, it helped us to create disciplined behavior.  Now, we do not use physical cash.  Instead, we keep track digitally through our monthly tracking and keep it in a savings account—more about physical and digital envelopes in the future.  

If you have not started an envelope system, I highly encourage you to do so. As my Grandma Wanda used to say, “An ounce of prevention saves a pound of trouble.”  Contact me if you would like to know how to start your envelope system.

And remember, Christmas is on December 25.  With a solid financial plan in place, you can start saving and enjoy the holiday season with peace of mind, knowing that you're prepared for the expenses that come with it.

Step Up & Start Now on your Christmas Envelope

The Envelope System: An Old-School Approach to Budgeting | Trades Ways. https://tradesways.com/the-envelope-system-an-old-school-approach-to-budgeting/