Now that the finish line's been reached, it's time to start the race.

The race to having Christmas gift-giving handled financially, I mean.

Readers should know by now that I am a devout follower of Mary Hunt's Freedom Account principles. I have preached this idea from the blog-tops, and will continue to do so. The concept has literally improved my life.

Good financial habits are golden. I cannot overstate the importance of making a habit of saving up for expenses that you know will arrive in the future. Smart folks save up for the known as well as the unknown.

Christmas, it just so happens, is a perfect example of a known expense.

Barring some really staggering developments, Christmas is going to happen on next December 25, too. If your Christmas, like mine, involves spending money, then you should be preparing for this right now.

Here's what I've figured out: During recent years, my household has spent roughly $1k per year on gifts. This includes Christmas, birthdays, and other incidental gift-giving expenses. Therefore, I've made it an iron-clad habit to set aside $80 per month for just this purpose. (Well, this gets me to $960, which is close enough for our needs.)

"Prepaid" gift expenses such as this aren't the only funds I keep in my Freedom Account and add to on a monthly basis. Our life-insurance dues (billed annually) are there, too, as well as car-insurance premiums (paid every six months) and our ADT alarm service (every three months). There are more, but you get the picture. These are expenses we know will be coming. It only makes sense to ensure that we'll have the money ready to go when the actual bill arrives.

The point is this: Your life will be measurably better if you treat known future expenses as monthly bills now, and save up for them on a monthly (or weekly) basis.

When other families are stressing over Christmas bills, yours will be as carefree as Frosty in deep freeze. With those Freedom Account savings in place, there'll be no need for debt — and therefore, money worries — to ever enter the picture.

Where Do I Keep My Freedom Account?
Answer: ING Direct!

Labels: Budgeting, Saving