Are Christmas Bank Accounts Worth It?

What I Notice...

One of the things that we learn to do at Coach Chris is to plan and those of my clients that have been with me for a while now have learned the importance of this skill. Christmas especially is a time of year when there is a big demand on our hip pocket and if you have taken the time to plan and save for it, you can go through the season without feeling any of the financial stress that is so often felt when you do not.

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I decided to ask several of my clients what they did and I think that Trish's answer describes the basic principle of planning ahead.

Trish has been saving $40 per fortnight for as long as I can remember. She chooses to save cash in an envelope but the same principle applies if you set up a special bank for the sole purpose of paying for Christmas. And in Trish's words, "Christmas is not just the gifts". She is right and when a new client comes on board a coaching program at Coach Chris they soon learn this.

Once you tally up the gifts, the decorations, the celebration lunch, the extra meals you produce when friends and family pop over to wish you merry Christmas, the teacher's gifts for your children to give to their school teachers and the work parties that may involve a new outfit etc. etc. etc... you realise that it is indeed more than the money spent on gifts.

So using Trish as an example - she has discovered over the years that by saving $40 every time she gets paid she will have $1,040 in her envelope by the time she starts her Christmas spending in November - but wait isn't that only 11 months to save? No - by starting her savings in December, Trish's Christmas fund will be ready by November and she can get started with her purchases.  Trish has found this to be so beneficial for several reasons:

• It takes away the worry over affording Christmas

• It gives her a natural boundary - when all the money is gone from her envelope savings - it is gone!

• She does not have to fear a credit card bill arriving in February - which puts a bit of a dampener on the lovely memories created by Christmas.

So maybe it is too late for you this year - you may need to read the 10 practical Tips to Save at Christmas

but when Christmas is over, take the time to tally up everything you have spent and then divide the total by how many pay days you have until the first week in December next year and that is the amount you need to save every pay so that you can enjoy spending next Christmas.

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So is having a Christmas savings account worth it?

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