Ever heard of a Christmas Club? Unless you're over forty, the answer's probably "No."
Which is not surprising. Christmas Clubs are something most banks used to offer decades ago to increase deposits. That gave them actual money in their vaults they could then lend out for a profit. Meanwhile, the customer saved up a tidy little amount to use for the Christmas buying season. Most banks even gave you cute little deposit books with Santas or Christmas trees on them. (You don't know what a savings account deposit book is? Geez, you're such a kid!)
Ah, those were sweeter, simpler times. These days, banks and other financial institutions make their money by charging high interest rates on credit cards. Christmas is a wonderful time for them, since consumers use those cards to rack up charges they then spend the next 11 months (or more) paying off. With interest.
I hate to be a Grinch and ruin the credit card issuers' holiday season, but I have a suggestion: instead of going into hock to pay for the holidays, establish your own Christmas Club.
Once a week, put some money aside. I don't think you have to put it in a bank account, since most short-term savings accounts now offer such low interest rates it's hardly worth the trip to make a deposit. Put it an envelope, in a sock, in a tin box. If you're nervous about stashing cash at home, write checks to yourself.
Start today and you have twelve weeks to save before December 15. Save $30 per week, and you'll have $360 stashed before you even start shopping. $50 per week will add up to $600. Spend $600 cash instead of putting that amount on a card with 18.99% interest (that it takes you a year to pay off) and you'll save more than $113 in interest.
Put a few dollars aside, too, to use the week after Christmas, when cards, wrapping paper, ribbon and Christmas ornaments are deeply discounted. Then take the amount you spend, divide it by 50 and, the first week in January, start saving for next year!
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