Set Budget Now for 2012 Spending

The holidays are now just a fond memory, but that credit card bill sitting on your kitchen counter remains a call to action: A holiday savings plan.
 
Traditionally, Christmas club accounts have been offered at credit unions and most banks and now some retailers offer them as well. In all instances, customers make regular payments into the savings account until they start making withdrawals for holiday expenses in the fall.

If you’re considering setting up a Christmas club account, your BBB offers the following suggestions:

Build a budget and stick to it. Consider how much you will want to spend for the holidays and how much you need to set aside every month. The BBB, along with ClearPoint Financial Solutions, has developed an interactive budget tool that includes a holiday spending calculator.

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 and ask around. Interest rates on Christmas club accounts vary, so shop around for the best deal.

Read the fine print. Christmas clubs are essentially short-term savings accounts, but terms vary. Some require higher opening deposits or minimum monthly deposits. In addition, some impose a financial penalty for withdrawing funds before the holiday shopping season begins.

Automate the process. Most Christmas club accounts allow for monthly automatic deductions from your bank account or paycheck. Just make sure that you don’t set aside so much that you run the risk of overdrawing your accounts.

Know the deal with retailer Christmas clubs. Some stores now offer their own Christmas clubs. However, the money tucked away with the business all year long can only be used at its stores, so evaluate your holiday shopping needs before signing up with a specific retailer.

Start With Trust. For trustworthy consumer tips and information, visit wynco.bbb.org or call 970-484-1348 or 800-564-0371.
 

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