Think it’s too early to save for the holidays? Nope, let’s plan now!
“Next year, I’m going to set a Christmas budget and I won’t go into debt for the holidays this year!”
And then December rolls around, and you haven’t saved anything. You panic shop, overspend, charge your credit cards for future-you to worry about, and then experience some intense buyer’s remorse in January while cringing at your credit card statements.
Sound familiar? Let’s help you break that cycle and start saving for the 2025 holiday season with an actionable and realistic plan.
How much should I save for the 2025 holiday season?
Americans reported spending an average of $902 on gifts and holiday items for Christmas in a 2024 survey. Based on that, let’s say a decent savings goal is around $900 to $1,000 for the 2025 holiday season.
And if you don’t spend that much (or at least, don’t plan to), then you can stash anything extra in your regular savings account. So, no harm, no foul.
5 ways to save for the 2025 holiday season
1. Basic three-month savings goal
With a $900 savings goal in mind, here’s how you can break up contributions to meet that goal in just three months:
- $300/month
- $150/biweekly
- $75/week
- $10/day
If you have a regular paycheck, you can set up automatic savings contributions for even less effort. Talk to your employer about how your paychecks get distributed, and see if you can set aside a percentage of your paycheck to be sent to a savings account. For example, if you earn $2,000 biweekly, you can ask your employer to direct deposit about 7.5% of your paycheck to your savings, which means you’re saving $150 per paycheck automatically.
Here are some other percentages to stash away $900 in three months:
- $800 biweekly: 18.75%
- $1,000 biweekly: 15%
- $1,500 biweekly: 10%
- $3,000 biweekly: 5%
2. Conservative savings goal
If $900 feels like way too much, then don’t set that goal! That figure is just an average. The right goal is whatever fits your budget and priorities.
Alternatively, a more conservative savings plan for three months can include:
- $10 biweekly: $60
- $20 biweekly: $120
- $50 biweekly: $300
Remember: Whatever you can safely afford to save is what you can safely afford to spend. The idea behind having holiday savings is to avoid debt and overspending — not to strain your finances so you can flood family and friends with tons of gifts. Your budget should match your wallet and your priorities.
3. Save when you can
Not everyone has consistent pay. If you’re a server, work on commission or do contract work, you may not be able to commit to a regular savings plan. If that sounds like you, consider doing bulk savings deposits when you’re able.
For those with sporadic pay, I’d recommend the envelope budgeting method. You can use physical envelopes or virtual ones with a bank account that lets you make savings goals.
The envelope budget method is simple: Each envelope is labeled with a spending category, such as rent, utilities, groceries and so on. For the purpose of saving for the holidays, simply create an envelope labeled “Holiday savings” and deposit cash into the envelope when you can.
Your deposits might be all over the place, but it doesn’t matter — you’re still saving, and the envelope doesn’t care when you deposit.
4. Christmas club account
If you’re often tempted to spend what you’ve saved on unnecessary items, Christmas club accounts could be a great way to save for the holidays.
These are locked savings accounts that “unlock” when it’s nearing the holiday season. Christmas club accounts also have early withdrawal penalties, similar to CDs, to discourage you from dipping into those funds before you actually need them.
Like regular savings accounts, they earn interest on the deposits you make throughout the year. In most cases, the bank or credit union with the account sends you a check for what you’ve saved and interest earnings in late November or early December.
5. Cut back and save it
I’m as guilty as anyone for having multiple subscription services and paying for gym memberships I rarely use. Not only is it smart to end subscriptions you don’t need, but canceling them can mean extra money you can stash away.
Here are some expenses you can temporarily stop or cancel to help save for the holidays:
- Netflix. Streaming is pricey, and a Netflix plan costs between $7.99 and $24.99 per month. If you pause your subscription for three months, you can save between $24 and $75 in three months.
- Monthly box memberships. Think subscriptions like Ipsy, Allure or HelloFresh. These weekly or monthly subscriptions can cost anywhere from $15 to $300 per month, depending on your plan.
- Gym memberships. Using Planet Fitness as an example, a membership costs $15 to $24.99 per month. If you’re not using your gym membership, cancel it and tuck that cash away.
These are just a few examples. Go through your bank statements to identify any other “unnecessary” spending you can pause for a few months to make it easier to meet your holiday savings goals.
Bottom line
We tend to spend a lot during the holidays, averaging $900 for the season. A balance like that on a credit card can mean months of minimum payments to pay it off, high interest charges and hassle. Avoid holiday headaches and stress by preparing yourself for the holiday season months ahead of time.
On top of that, taking the time to figure out how much you can afford to save will tell you how much you can afford to spend.
