How to take control of your finances before, during and after Christmas.
Making a Christmas budget is a great way to allocate funds, track spending and to stay on stop of your finances during the festive season. All it takes is a little planning and knowing what to do with your monetary gifts.
Before Christmas: How to effectively save using a Christmas Club account
The Christmas Club is a savings program that was first offered by various banks in the United States during the Great Depression. The concept is that bank customers deposit a set amount of money each week into a special savings account. They receive the money at the end of the year in time for Christmas shopping.
EXAMPLES: WHAT ARE THE FEATURES OF A CHRISTMAS CLUB SAVINGS ACCOUNT?
People’s Choice Credit Union offer a Christmas Savings Account that provides a financially stress free Christmas. Here are some of the features that the Christmas Savings Account has to offer:
- Deposits. You can make an unlimited amount of free deposits. There is no minimum deposit required to open an account.
- Accessing the account. You can access your account in between 1 November and 31 January. If you access the account outside this time period, there is a $5 fee per withdrawal.
- Interest rate. The interest rate is set at 1% per annum (p.a).
- Fees. There is no monthly administration fee. You are able to withdraw from a branch or agency twice per month with no fee. A $3 fee will be applicable if you withdraw money from your account more than twice a month.
- Payments. You have unlimited free BPAY payments and Internet or phone banking transfers.
- Payroll Splits. Free payroll splits can be set up to credit your account all year round. This is a good way to put money aside for the Christmas season.
The Sydney Credit Union (SCU) also offer a Christmas Club Account. Here are some of the comparative features of the SCU Christmas Club Account:
- Deposits. There is no minimum deposit required to open this account.
- Accessing the account. You can only access the account in between 1 November and 31 January.
- Interest rate. The interest rate is set at 0.5% per annum (p.a). This rate applies to account balances lower than $500,000 and only for a limited time. The interest income is calculated daily and paid annually on the 30 November.
- Transactions and payments. Over the counter payments are accepted. You don’t have Visa debit card transactions or BPAY payments.
Rates accurate up to the 25th November 2015.
During Christmas: How to save money
There are four main types of savers in Australia. A dreamer has saving goals but has no real plan about how to achieve their goals. This category makes up 11% of the Australian population. A savings account is a good way to save money for the Christmas period as it regulates your spending and prompts you to save.
A hit and miss saver usually has a plan to achieve their savings goals but do not normally stick to it. 24% of Australians fit into this type of saver category. If you’re this type of saver, consider a bonus saver account that awards you bonus interest for regularly saving. That extra incentive might do the trick.
Most Australians fall into the slow and steady saver category during Christmas. 37% of Australians are slow and steady savers. These people save small amounts on a regular basis and will eventually reach their objective.
Slow and steady savers typically open a savings account that encourages the user not to touch the money until it has matured. A Christmas savings account will help people save money for Christmas time.
The fourth type of saver is fast and determined. They are focused on achieving their savings goals and do it as quickly as possible. 28% of Australians choose to follow this method of saving.
Although this is an effective method of saving, it can be quite stressful. Opening a Christmas savings account would allow more time to save and would release the pressure of saving at the last minute.
There are certain steps to follow when having successful saving habits. Knowing how much money you need is essential. This is the first step so you know what to work towards. Implementing a clear savings plan will help you track your saving progress.
Regularly review your savings and the progress you are making. In doing so, you’ll be able to track your progress and identify any problems that may arise. Tracking progress throughout the year will be useful during Christmas as you’ll know how much you have saved.
Have a specific time frame for completing your savings goal. Having a deadline will motivate you to actively focus on saving. The timeline set for a Christmas savings account is one year. A set timeline will encourage you to save incrementally.
People typically save for a wide range of assets; 48% of people save for a house, 47% save for a holiday, 47% for the future, 33% for an emergency fund and 13% for a car.
Tips for easy saving
- Learn from past Christmas mistakes. Did you feel pressure to get all your shopping done at the last minute? Did you spend more than you thought you would? Try making a list and work out what your friends and family would really need from you.
- Plan your shopping. Find out what stores offer the best deals so you can keep to your budget. Myer, Target and JB Hi-Fi are major retailers that offer deals close to Christmas.
- Smooth over your Christmas shopping with lay-by gifts. For those with children, most toy sales occur in July. Save time and money with lay-by gifts.
- Monitor the plastic. If you get carried away at Christmas time and can’t control your spending, a credit card isn’t the best option for you. Try paying in cash so you know how much you have spent or reduce your credit limit on your card.
- Cut Christmas Day food costs. Simplify the menu. A classic meal can work just as well as any other. If you’re eating with family and friends, get them to bring a plate so that you can all split costs. Buy items now. Stock up on all your Christmas needs before the day happens.