Why now is the time to save for Christmas 2024 | money.co.uk (2024)

FAQs

Why now is the time to save for Christmas 2024 | money.co.uk? ›

It's never too early to start planning for a big savings goal, especially when interest rates on savings accounts remain competitive. Christmas should always be treated as a long-term savings goal, as it will take a big chunk out of your budget.

Depositing $20,000 in a savings account is wise when you have a plan for the money, such as a near-term expense or rainy day fund. For long-term goals, like retirement, you might be better served by opening a brokerage account or certificate of deposit (CD).

Treat saving in the same way as you would a bill. Committing to saving a regular sum each month or week is more effective than simply saying you'll save whatever you have left over, which might be nothing. Try to be realistic – it's better to commit to a manageable amount than to aim too high and give up.

Long-Term Security

The future is unpredictable, and financial emergencies can crop up anytime. Saving money allows you to create a safety net for your future expenses as well as unplanned financial needs. The more you save, the more peace of mind you have, as you are better prepared for anything life throws at you.

The best way to do it? Start saving in January, put aside a little money each month, and you'll be golden come December! But if you're just now starting to save money for Christmas, don't worry. There's still plenty of time to save up a stash of cash between now and then.

The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.

The best way to start saving for Christmas next year is to look at your finances and track how much you can realistically save each month. Review your bank statements and assess where your money is spent. Plus, if you can find any miscellaneous direct debits that you don't need anymore and can delete - bonus points!

However, a common guideline is to allocate around 1-2% of your annual income for gifts. Again, it's super important to set a budget that aligns with your financial health and priorities, which ensures a joyful holiday season with minimal financial stress.

Is a millionaire's best friend? ›

It may sound like an intimidating term, but it really isn't once you know what it means. Here's a little secret: compound interest is a millionaire's best friend. It's really free money.

“Only 31% averaged $100,000 a year over the course of their career,” the study found, “and one-third never made six figures in any single working year of their career.” Just look at the story of former custodian Ronald Read for a perfect example.

Saving money is hard. One of the most common reasons is that you might not have a good enough reason to save. Maybe you're overly focused on the present, or maybe you simply don't know what you want in the future. Either way, you need to get a vision for what you want to achieve with your money.

The number one way to save for Christmas is to make a budget. Plan out exactly how much money you need for food, gifts, activities, and travel. If you plan this early (autumn or even summer) you'll have more time to save. Sticking to your budget can be tough, but it's essential for keeping costs down.

Despite popular belief, it's never too late to start planning for your golden years. Of course, experts recommend beginning as early as possible, but even if you're a late bloomer to retirement savings, you can still make a difference for your financial future.

Holiday spending is up, another good sign for the economy Data show consumer spending from November 1 through Christmas Eve rose 3.1% year over year — a figure in line with the decade leading up to the pandemic and another positive sign for the economy.

The recommended amount to save varies from person to person, as everyone's financial situation differs. But for many people, $20,000 is a sizable emergency fund goal that will go far. If you have a large chunk of savings set aside, make sure you keep it in a bank account that earns interest.

Meanwhile, you might have a fairly large savings balance to the tune of $20,000. That's definitely a lot of money. And in some cases, that might constitute a really robust emergency fund. But in some situations, a $20,000 emergency fund might also leave you short.

Rule of thumb? Aim to have three to six months' worth of expenses set aside. To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount.