If you are like me, you often feel a sense of panic when the time for Holiday shopping hits. You don’t want to use those credit cards, but you don’t have the cash to pay for it all either! With a simple New Year’s resolution you can make that stress vanish!
Ahhh….the New Year’s resolution – these solemn declarations we make to ourselves to change some aspect of our life for the better. Maybe you’re going to exercise more? Lose weight? Smile more and appreciate the small things in life? All are terrific and all will make you feel better as the months go by.
Let’s talk about one New Year’s resolution where you may not see any dramatic results right away. Yet, in about 1 year’s time, you will have made a change that could yield fantastic results. This is one New Year’s resolution you’ll be so happy you stuck with.
Take advantage of a Christmas club.
For decades banks and credit unions have been offering this service to its customers. Each week, each pay period, or each month putting aside a little bit of money into a savings account will help you to budget for next year’s gifts, food, or decorations. It is a fantastic tool that will help reduce the stress of the holidays and the credit card debt that many overextended families experience.
According to the Credit Union National Association, about 78 percent of credit unions run Christmas Clubs, and interest spiked in 2009.
•The Better Business Bureau (BBB) recommends that it’s never too early to consider budgeting for next year’s holiday season and offers the following advice on setting up a Christmas Club account: Build a budget. Consider how much you spent in the previous holiday season to help anticipate how much you will want to set aside every month.
•Start Saving Now. The sooner you start setting aside money every month, the better. By setting up a Christmas Club account in January or February you’ll benefit more from the interest rate and start the year off on the right foot.
•Shop Around. While the interest rates on Christmas Club accounts is not typically very high, it can vary, so shop around for the best deal.
•Read the Fine Print. Christmas Clubs are essentially short term savings accounts, but there are a few details that make them different. In some cases, there might be a minimum required deposit to open the account or a minimum amount you must deposit every month. In addition, there is often a financial penalty for withdrawing the funds before the holiday shopping season arrives.
•Automate the Process. Most Christmas Clubs accounts allow for monthly automatic deductions of the amount of money you determine from your bank account or paycheck. This helps lessen the pinch. Just make sure that you don’t set aside so much that you run the risk of overdrawing on your accounts.
•Know the Deal with Retailer Christmas Clubs. Some stores are now offering their own Christmas Club. The money socked away with the business all year long can only be used at their stores, so evaluate your holiday shopping needs before signing up with a specific retailer.
For more advice on budgeting for the holidays, visit www.bbb.org.