How to Start Saving for Next Year's Holidays Today
Turn next year's $890 holiday target into $75 monthly transfers, separate savings, and refund splits.
Open a separate holiday fund — a savings account used only for gifts, food and decorations — and start an automatic monthly transfer today. Divide your target by 12 to set the amount, so an $890 goal means about $75 per month. The National Retail Federation reported planned 2025 holiday spending of $890.49 per person in its second-highest holiday spending survey.
That level makes early monthly saving practical. Starting now spreads the cost instead of squeezing December pay.
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How much will you need?
Pick a total based on last year plus any change for travel or family size. Write gifts, food, decorations and shipping as separate lines. Keep the total in sight when you shop.
The Consumer Financial Protection Bureau advises setting a budget and subtracting usual expenses to set a savings amount in its five-step holiday spending plan. It also suggests calculating earnings between now and the holidays. Use that math to fix your target.
If pay varies, use your lowest normal month. Divide your chosen total by the months left until December. Move the result into your fund each payday.
Adjust if your target changes.
How do you make saving automatic?
Automation moves money before you can spend it. The Consumer Financial Protection Bureau calls recurring checking-to-savings transfers and split direct deposit an easy consistent-saving method in its savings guide. Set the transfer for the day after payday.
Start small if money is tight, then raise the amount after one month. Keep the holiday fund separate from daily spending. Do not pull from it for other bills.
- Open a savings account used only for holidays.
- Set a monthly transfer for the day after payday.
- Check the balance at the start of each month.
Can a tax refund jump-start the fund?
A refund can cover part of next year's target in one move. The Internal Revenue Service allows splitting a federal refund in any proportion into up to three U.S. accounts via Form 8888 in refund-splitting answers.
Send one part directly to holiday savings. File the form with your return and keep the holiday share separate. Spend only the amount you planned for this year.
Leave the rest to grow for next season.
How do you avoid holiday debt?
Cash in the fund limits what you charge in December. List each person and set a cap before you shop. Stop buying for a category when its line runs out.
Track spending weekly during the season. Return or exchange early if you overshoot. Put any leftover fund money toward next year.