The holidays are over. Unfortunately, all those thoughtful gifts and cherished memories came at a price – a big pile of holiday debt. If you are still reeling from your year-end spending, it’s time to take action. Plan now for the year’s holiday purchases.
You can celebrate credit-card-free next December if you start saving now and continue to save throughout the year. Making purchases with cash you’ve saved all year long will help you stay on budget and avoid the temptation to overspend.
Taking time now to plan what you want to spend next December, along with budgeting in your holiday savings account deposits all year, will help you feel in control of your finances throughout the year and start the New Year without any holiday debt.
First, you’ll need to know how much to save. In 2013, families spent an average of $801 on their holiday purchases, and financial experts suggest you spend 1.5% of your annual income. Of course, consider your own circumstances and obligations. Once you have a plan and know how much you want to spend, choose one of the following options and start saving today: 
Christmas Clubs
A Christmas Club is a holiday savings account traditionally offered by credit unions. These accounts pay interest, and in some cases allow you to have your savings directly deposited as you earn the money throughout the year. Typically, funds in these accounts cannot be withdrawn until the fall months, helping savers fight the temptation of using these funds for another purpose. Make sure the amount you deposit is small enough that you won’t miss it, but will build up over time to help cover the cost of seasonal gifts and celebrations without incurring holiday debt.
Savings Accounts
A standard savings account won’t limit when you withdraw the funds, like a Christmas Club can. For this reason, it’s smart to find an account that you can fund with direct deposit, but that you can’t withdraw from with a simple visit to the ATM or quick online transfer. An account without easy debit card access will be ideal. Simply plan to transfer your holiday cash before you begin your holiday spending.
52-Week Savings Challenge
Fund your holiday savings account with the 52-week savings challenge. This simple challenge starts with a $1.00 deposit in the first week of the year. Each week, add one dollar to your savings deposit amount – your final savings deposit at the end of the year of $52.00. This challenge will help you save almost $1400 by the year’s end. Considering the average family spent almost $970 on the holidays last year, this plan should leave you with funds to spare and no holiday debt to carry over into the new year.
