Not too long ago, Christmas was a truly stressful time in the Llama household. We were used to having “Plastic Christmases” - you know the kind. Every gift was purchased on a credit card. That wouldn’t have been a bad thing - if we had the means to pay off said card at the end of the month. That was not the case however - the card had a revolving balance already, and Christmas just meant it grew larger.

We no longer celebrate the Plastic Christmas, for a number of reasons. One, I make a lot more money ( that helps tremendously ). Two, my wife and I are better at managing our money. And three, this is the big one, we have a Christmas fund. Luckily, this is something my job offers. I choose the percentage ( currently I go for 5% ), and they take that amount out of my paycheck, after taxes, automatically. I never see this money, so I really don’t miss it. Once the fund maxes out at $2,000, they stop taking out the 5%. I get a 5% raise for the rest of the year - neato!

I’m actually lucky enough to get a 50% bonus on top of that money ( so I get $2000 + $1000, and pay taxes on the $1000 ). That’ll be about $2700 this year for my Christmas needs. While it sounds like a lot, it has to cover gifts for myself, my wife, our son, our entire families, and plane tickets to visit our folks. We may or may not decide to stay in a hotel this year. The money is quickly used up, but it serves its’ purpose well. Without that fund, Christmas would be a lot more stressful than it already is.

Set up your own Christmas Fund

If your job offers a similar plan, you’d be foolish not to take part. A 50% return on your money, in addition to a stress-free Christmas is hard to beat. But if you don’t have that benefit, that doesn’t mean you should miss out on the fun. Open up a separate savings account. Each time you get paid, calculate 5% of your take-home pay, and transfer it to your Christmas savings account. Set a limit ( whatever you feel comfortable with ). Once you hit your limit, stop contributing - you just got a 5% raise. And when Christmas rolls around, you don’t need to fret about what to do - you already have a fund set up. Relax and enjoy the time with your family instead of worrying.

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