It’s snowing AGAIN right now and I have major winter fatigue! Over 75 inches of snow this winter ALREADY in the Philly suburbs and it is only mid-February. Visions of daffodils are dancing in my head. I can’t wait to leave this winter behind and never see a another snowflake. But when money is tight you really need to plan ahead. Way ahead.
When living paycheck to paycheck any deviation in your bills can send you scrambling back to using credit cards. For us, Christmas is one of those cases. We don’t go crazy at Christmas buying gifts for our three kids and family members, but the cost is definitely greater than our monthly discretionary income at this point. It would be the perfect set-up for a another failed attempt to get out of debt.
To avoid the squeeze I know is coming this December I decided to start a “Christmas Fund”. My husband gets paid bi-monthly and we are putting $20 a paycheck away now – so come Christmas we will not have to resort to credit cards to pay for it.
I’m putting this money in a sub-account at ING Direct . I have enough faith in my budget for the first time ever that I know I will not need to raid this account. But if you don’t trust yourself yet, many Credit Unions offer “Holiday Accounts” or “Christmas Club” accounts where they offer “bonus rates” with no penalties on withdrawals IF you don’t touch the money until November. Even Kmart and Sears got in on the act last year with 3% BONUS rates on gift cards.
I’m hoping this plan will mean a less stressful holiday season. The alternative is to pretend Christmas isn’t coming this year and AGAIN be faced credit card bills in January.
NOT "brought to you by Chase" this year!
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Stay at Home Mom CFO - one mom, one income, too many issues... 
February 16, 2010 at 9:26 pm
I completely agree that those without much of a problem should stick with a savings account (maybe SmartyPig for a little bonus if you’re getting a gift card?) while those who don’t trust themselves and aren’t good at budgeting should get someone else to force them save.
February 18, 2010 at 10:04 am
Yep – It would be smart to use SmartyPig at a 2% especially since the ING savings rates are well-below 2%. And Amazon.com offers a 4% boost! With 3 kids – I only wish Toys R us offered more (they are 2%) 😦
February 17, 2010 at 4:01 pm
Great idea! I use the budgeting software in Mint for much the same purpose. I can roll each item over each month and although I started in the hole, the ship is slowly righting itself, thank goodness.
Keep up the great work!
February 18, 2010 at 10:07 am
Thanks Tracy! I’m chugging along. I’m still using PAPER to track my budget. A lot have people have good things to say about Mint. When I decide to leave the stone-age I may give it try.