Prepare for the Holidays
Christmas may seem like a far ways off, but if you are like many people you may find that the holiday season brings a lot of extra bills and expenses. In fact, there are plenty of people who are still trying to pay off all the debt they incurred during the last holiday season. For this reason, it’s time to realize that right now ’tis the season to prepare for the holidays.
Most banks and credit unions offer Christmas savings accounts. These are small accounts that you use to automatically deposit a certain amount of money on a recurring basis with the sole intent of taking the money out around October or November in order to use the money for holiday spending. Most financial institutions will even automatically deposit the funds right into your checking account when the saving cycle has ended, and this is your signal that it’s time to start shopping for the holidays.
Holiday savings accounts may not pay out as high an interest rate as other savings products do, but there are a few advantages to these types of accounts nonetheless:
1. You know the money is absolutely earmarked for your holiday shopping and spending. If you actually do save for holiday spending, yet allow the money to mingle within another account, you might not keep your records straight. You don’t want to spend more than you budget just because you aren’t entirely sure how much you saved for shopping.
2. The account is automatic. In most cases, the financial institution will keep your holiday savings account going until you request for it to be closed. That means if you open one up now and start stashing money away for the impending holiday season your account will stay open after the season has long passed. You might not even notice the automatic payments sent to the account each month, and the next thing you know it’s Holiday Season 2009 and you have a fully stocked holiday account.
2. Holiday accounts help you avoid debt. If you put $500 worth of purchases on your credit card, the amount seems daunting. On the other hand, if you put just $42 a month into a holiday savings account you’ll have more than $500 available for your gift shopping. Bonus: You won’t have to pay interest on anything.
Set up a holiday savings account now so you can avoid going into debt when the holiday season rolls around.
