I got my first real job at age 15 and opened my own real savings account that very same year. One of my co-workers at the card store where I worked told me about the Christmas Club that she joined at the bank. She would deposit a certain amount of money into this special savings account every time she got paid, and then by the time Christmas rolled around, she had enough money saved up to buy her gifts.
I never got around to opening my own Christmas Club account, but I was intrigued recently when I heard that Sears and Kmart had reintroduced the concept of the Christmas Club. Like the bank-based Christmas Club of years ago, these retailers allow you to put money aside for future purchases to be made for the holidays. Here are two things to keep in mind if you’re interested in this Christmas Club concept:
- If you active your card between now and October 31, Christmas Club card users will earn a three percent reward – up to a maximum of $100 – based upon the value they have on their Christmas Club cards on November 14.
- And speaking of November 14th, that is the last day you can add funds to your Christmas Card account. Why that date? So it gives you plenty of time to cash in and go shopping at Sears or Kmart!
Best of all there are no fees associated with the Christmas Club program, and the amount on your card never expires.
Here’s why a Christmas Card–or a self-created Christmas Club account through your bank–makes sense this year. According to a recent survey (from Sears and Kmart), the troubled economy has Americans worrying about their finances more than ever before. Nearly six in ten (58%) are more concerned about how they are going to pay for their holiday shopping this year than they were last year.
Here are some other highlights from that survey:
- More than half of Americans (56%) say they plan to save money for the winter holidays this year.
- Nearly one-third (32%) of these folks already started stashing away some funds
- Another 38 percent plan to start saving cash in August and September (hope they made that goal).
- Nearly three-quarters (72%) plan to do things differently this holiday season, whether it’s spending less on gifts (57%), shopping at more affordable stores (53%), or planning and setting a shopping budget ahead of time (49%).
- 33% of those who plan to do things differently this year say they plan to use their credit cards less this holiday season
Despite these dire economic times, one priority has not changed: Americans’ generous desire to give gifts. Seventy percent admit they’d like to give gifts to more people, but think they might not be able to afford it.
Does a Christmas Club–or Chanukah Club or Kwanzaa Club–make sense for you this year? If so, tell us why and how.
READ LEAH ON HOME GOES STRONG
It does not make sense for us because we already have a budget that includes gifts. Money goes into that category every month, so we know for the year how much we have to spend. Yes, that’s for all gifts, including birthdays, weddings, etc., but we’ve been doing this for years, so we know how to allocate within categories.
Jen:
I’m impressed that you’ve got this kind of system set up. Well done!
Leah
A couple of years ago, we decided we wanted to be able to be generous at the holidays – with our families, with each other, with entertaining, with a family we sponsor through a nonprofit. So we set up an account with an online bank for Christmas. It pulls a set amount from our checking account each month, and by the end of the year we have enough that we don’t have to go into debt for the holidays. Sometimes we pull from it for other gifts, too.
We use this strategy for other savings, as well – tuition, summer camp, vacation – and it makes saving an easy, automatic part of our budget.
This is cool, though I wouldn’t use it for gifts. Landsend.com!
Saving ahead for the holidays (or any expense) is always a good idea. I am going to pass on the store specific holiday cards though for this reason– I might not find that perfect gift at the perfect price at that particular store and then I would end up having to settle (and possible pay more) for something else.
I hear what you’re saying about store-specific cards. However, my husband loves Sears so I would have no trouble finding something for him there!
Leah