Can you imagine a Christmas with no financial stress?
What would it feel like to receive a check in the mail just in time to pay for all things Christmas?
That was the premise behind what, years ago, was introduced as a Christmas club account.
What is a Christmas Club account?
A Christmas club account is a type of short term savings account that many financial institutions used to offer as a way to save for Christmas.
Throughout the year, using a coupon book, deposits were regularly made into the account.
Sometime in November, the bank mailed you a check for the total of all the deposits which you had made.
Just in time to pay for Christmas.
Although some financial institutions still offer Christmas club accounts, they have declined in popularity, and I haven’t heard one mentioned in many years.
However, a Christmas club account is still a stellar way to save for Christmas and avoid financial stress at the holidays.
If you would like to eliminate the financial hardship that Christmas shopping often brings, don’t wait on a financial institution to offer a genuine Christmas club account.
It’s easy to create your own.
It is quite simple to create your own Christmas club account
Create a separate account
Whether it is a savings account, or an envelope tucked away in a drawer, creating a separate place to save for Christmas is critical to success.
If you choose to open a separate account (my preference), make sure there are no hidden fees or minimum balance requirements.
Determine how much you need to save
What is the magic amount of money that would take the financial sting out of Christmas? That is the goal amount for your Christmas club account.
This amount will vary for everyone. Don’t base this amount on anything but your individual circumstances.
I have read amounts thrown out by many experts, based on who knows what.
Experts don’t live your life, you do. Base this number on what is right for you.
If the amount you need seems daunting, start smaller. Remember, something is better than nothing!!
If a guide would help, banks used to offer the accounts in increments of two hundred and fifty dollars, five hundred dollars or one thousand dollars.
Divide the amount you want to save by the number of months that you have left before Christmas.
The beauty of creating you own Christmas club account is that you can start any time.
The amount that you have decided you need, divided by the number of months you plan to save, is your monthly deposit goal.
Budget for your savings goal
A zero-based budget is my favorite kind of budget.
Whatever budget method you utilize, the amount needs to be considered a monthly expense. Budget for your account just like you would any other expense.
If possible, make the deduction automatic
Treat paying your Christmas club account as though it’s a bill.
If possible, have the amount automatically transferred from your regular account to your Christmas club account.
Consider the growing funds off limits during the year
It will be oh so tempting to tap into the growing savings. Unless it’s critical, don’t allow yourself to withdraw the funds.
No matter how much you need the money now, you will need it just as much when you begin Christmas shopping.
The exception to this rule is that if you are purchasing something for Christmas.
The account is set up to pay for Christmas expenses. If that expense occurs in July, use the funds.
You will love purchasing something for Christmas and not having to juggle money from somewhere else.
Would you like to enjoy Christmas without any financial stress?
Create your own Christmas Club Account. It’s a little idea that will provide big dividends.
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