The holidays provide a great excuse for overspending. It’s only once a year, and there are ads and specials plastered everywhere, and after all, you have to get people *something*, right? So, you whip out your credit card and get busy spending, spending, spending. Then the minute Christmas is over, you start dreading those awful credit card bills you know are coming in January.
I’m hoping this isn’t you, but I know this is the experience of many people during the holidays. It used to be me, but about five years ago, I wised up. Doesn’t mean I went to go live in a cabin in the woods and stop buying gifts for the people I love. In fact, I LOVE to buy gifts for the people I love. I just don’t want to go into debt to do it.
I finally caught on that Christmas is going to happen EVERY year, and it happens on a pretty predictable schedule, right? Back when I was younger, banks used to have something called a Christmas Club account. I haven’t heard of one in years – I think maybe they went extinct. However, that doesn’t mean that I can’t make my own version of a Christmas Club account. That way I can set aside a little stash of money for the holidays, so I am not caught flat-footed once they clear away the turkey carcass.
It is actually a very simple concept and one that was very easy to implement. I just set up a separate checking account – a no-fee one, of course. You can even set one up on-line, but I chose a traditional bank because they were offering a $100 incentive to open an account – score! Then, I set up a modest direct deposit every payday from my paycheck – and then here is the key point, I forget about that account for 11 months out of the year!
I think that is why it was helpful for me to have my account at a separate bank. That way I don’t see it, smell it, or taste it. No temptation to dip into it when I have a bill that needs paying, or a cute outfit that is calling to me. I have a special debit card for it (not a credit card, just a debit) and that card stays safely locked away in a drawer until mid-November every year.
Then when it is time to start my Christmas shopping, I have a nice little nest egg that I can spend absolutely guilt-free for my presents. It really is a nice feeling and if I shop carefully, it is just enough to buy all the little must-have items for my family. And if I do go a little bit over, it isn’t nearly as big a catastrophe in January. Which means, I’m not still paying on those holiday bills into SUMMER – long after the items are sitting in the back of someone’s closet or have been broken…
Obviously, it is too late to start one for this year, but Christmas 2016 will be here before we can BLINK and if you open up an account right in January, then you too can have a nice debt free Christmas to look forward to!