How Much Have You Saved For Christmas?

Christmas is closing in on 230 days away!  What better time to get going on your Christmas savings.  It’s been about three years ago now that my wife and I started our own Christmas Club account at an online bank.  We signed up for a savings account there, and came up with a reasonable Christmas shopping budget for the next holiday season.

To make saving for Christmas as painless as possible, we divided our annual Christmas shopping budget by 26 equal contributions, since I’m paid every other week.  Each paycheck, a little bit of money is diverted to our online saving account.  The beauty of these contributions is that they are so small we hardly even miss them.  

In the past we were ill-prepared for most holiday seasons, and wound up charging Christmas gifts to our credit cards.  Those debts seemed to drag on much of the next year, until it came time to do even more Christmas shopping.  Since we had been focused on paying off debt most of the year, we had little cash saved up for the next year and out came the credit cards again.  It was a vicious cycle.

After starting our online Christmas Club account we have found Christmas shopping to be a much more enjoyable experience.  Each November, when Christmas shopping season is in full swing, we make a single withdrawal from the account and do our Christmas shopping with cash.  That means no debt chasing us for the remainder of the year.

Maintaining a Christmas Club account does take some discipline.  There have been many times throughout the year that we’ve been tempted to withdraw the money for another use.  However, since we are determined to never charge another Christmas present on a credit card, we find the resolve to leave that fund in place until November.

While you’re at it, get the whole family in on the savings act.  Last year, my kids expressed an interest in buying a small gift for both parents with some of their own money.  To facilitate this, we’ve encouraged them to start their own mini-Christmas Club accounts by opening saving accounts.  

This year, the plan will be for the kids to drop a little from each allowance payout into this account and withdrawing the money at the end of the year.  My kids’ eyes lit up when I told them saving just $1 a week for the entire year would give them over $52 to shop with next Christmas.  Hopefully, it is a lesson they will take with them into adulthood, and a tradition they can one day pass down to their own kids.