Updated: Aug 4
Now that Christmas is over, are you one of the few brave individuals who have checked their bank statement? On average American families were projected to spend $929 on gifts, cards, and food for Christmas this year1, and in 2015, only 43% of shoppers said they had a budget of how much money they would like to spend2. But don’t worry–this is not intended to be a Christmas overspending shaming blog. Let’s not dwell in the past, as Christmas 2016 is over. This is, in fact, the perfect time of year to establish a 2017 Christmas budget.
Creating a 2017 Christmas budget in December of 2016 will help to decrease overspending, ensure you are only spending money you have, and create a guilt-free, less stressful holiday season.
Young readers probably are not familiar with the term Christmas club, as they reached the height of their popularity in the 70s. Usually sponsored by a bank or credit union, Christmas clubs are savings accounts that automatically transfer $5 or $10 weekly from a personal checking account into a special savings account. That special savings account cannot be accessed until November to help ensure the funds will be used for their purpose, which is holiday spending only.
Essentially, this is a Christmas budgeting tool sponsored by the banks. If you save $10 weekly, there would be a balance of $520 by the time December 25th came around. If $520 does not seem like enough money to get you through the holiday season, then tack on an extra $8 to reach the 2016 average of $929.
Not only is this a fun and novel concept that just might come in handy during trivia night, but, more importantly, you can still use the concept today. Some credit unions still offer a similar program. If a bank or credit union does not offer a Christmas club, you can create one manually. Simply open another savings account and transfer your preferred dollar amount weekly or monthly. Make sure to set up an automatic transfer, which takes all the labor and thinking out of the process. If that seems too complicated, simply place a crisp 5, 10, or 20-dollar bill in an envelope weekly. Or try this third option: draft money weekly or monthly into a money market account.
The Christmas club is a very valuable simple budgeting tool. The benefits are:
Helps save money for the expensive holiday season
Grants you control over your money (only spend the money you have)
Creates guilt-free spending with less stress
Want to take the Christmas club to the next level?
To do this, expand the Christmas club into a “yearlong present club”. Add birthday presents, weddings gifts, and other presents to create a full year budget for special events.
Moreover, this concept of savings for future expenses can also be expanded to help pay for unexpected home and auto expenses, health expenses (think HSA), clothes, vacation, etc… For more information see a previous blog titled “Spending Plan.”
Hope everyone had a great Christmas weekend!
Feel free to reach out for more information or with questions.
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