Plan Ahead With A Christmas Club

The months leading up to Christmas means one thing, many of us are spending way beyond our means.  Let this be the year that you shop smarter by cutting back where possible, finding good deals and starting a Christmas Club savings for next year.  You might think you can’t afford to save but wouldn’t you rather find a few dollars to put away each week to earn interest on instead of paying those enormous interest rates to the credit card companies?

There was a time when consumers planned their holiday purchases with either lay-away or joining a Christmas club through their bank. Nowadays consumers think nothing of purchasing expensive Christmas gifts and putting them on a credit card instead. Unfortunately many stores have done away with lay-away, however it is still a good idea to put money away each week in a Christmas club so that you can have a debt free holiday. Even if it is too late to start saving this Christmas now is a great time to start a saving money for next year.

A good tip for saving money is to use a separate bank than you are currently using for bills and household expenses. This strategy works because you are less likely to dip into it if you keep your savings account separate from your checking account. I will admit it, in the past I have had trouble with impulse purchases a day before payday because I knew I could simply transfer money from savings to checking. By switching my savings to another bank I have learned to stick within my weekly budget and plan ahead.

For online savings I like Ing Direct online banking. They have competitive interest rates and are very easy to set up an account with. You can also set up several account giving them each nicknames to keep them straight such as “Christmas Club” “emergency fund” etc. You can make deposits whenever you wish through your current bank and/or set up direct deposit weekly, biweekly or even monthly. Saving should be automatic, however if you have a week that you just can’t afford to save then you can easily cancel or postpone your direct deposit.

Personally my strategy for savings is using both direct deposit and one time deposits. I have a little money automatically deposited in four different accounts each week: I have a savings account set up for emergencies, for my Christmas club and for miscellaneous. I also have what is called an Electric Orange account with a debit card for occasional online purchases. Some weeks when money is tight I will postpone direct deposits in every account except my emergency fund. Other weeks when I have a little left over I deposit it equally between all my accounts.

Just by planning ahead you can avoid going into debt. If money is tight then try setting up just two accounts right now, a Christmas club account and an emergency fund account. Put just $5.00 per week in each and supplement it with additional cash when you have it such as from working overtime, tax refunds, money from yard sales, selling on eBay, etc. Once you get into the habit of saving then you can slowly increase the amount you save and even set up more accounts.

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