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You’ve probably heard of “Christmas in July.” The American origin was an all-girls summer camp in North Carolina. Back in 1933, the whimsical co-founder requested a celebration, complete with carolers, a Christmas tree, even Santa Claus.
The phrase can actually be traced all the way back to 1892 in France, when it appeared in the opera Werther. A character warns: "When you sing Christmas in July, you rush the season." Financially speaking, beginning your holiday spending planning early actually makes a lot of sense, and can keep you from going into debt.
Jessica Gibson of Investopedia explains how opening a Christmas Club savings account can help you stay on track, so you're financially prepared come December:
What Is a Christmas Club Account?
A Christmas Club is a type of savings account where you make monthly contributions. Then, a month or two before the holidays, you can withdraw the funds to use for holiday purchases. Although Christmas Club accounts have been around since 1909, they're not very common now. Many people prefer to use savings accounts or charge purchases to a credit card.
However, Christmas Club accounts can be helpful in sticking to a budget. Once you open an account at a community bank or credit union, you make monthly contributions and wait to withdraw the funds until a pre-determined date, usually in October or November.
Instead of going into debt every holiday season, using a Christmas Club account allows you to shop using money you've already set aside for that purpose.
Tips to Get the Most From Your Christmas Club Account
It's easy to open a savings account and completely forget about it. To ensure you get the most value out of your Christmas Club account, try implementing a few of these strategies:
- Make a budget for how much you expect to spend over the holidays.
- Set a savings goal (so you know how much to contribute every month).
- Open your account early so you have plenty of time to fund it.
- Automate your deposits so you don't forget to make them.
- Check your account balance every month and make catch-up deposits if needed.
- Learn about early withdrawal fees, and don't take out your funds before your account's end date.
Learn more by reading the full article here.
Plan ahead and save before the holidays so you don't go into debt in order to spread cheer to the ones you love. A Christmas Club account makes it easy to automate saving so you can enjoy the season stress free!
The content on this site is intended for informational purposes only and should not be considered accounting, legal, real estate, tax, or financial advice. First Federal Bank recommends that customers conduct their own research and consult with professional legal and financial advisors before making any financial decisions. Links to third-party websites may be provided for your convenience; however, First Federal Bank does not guarantee the reliability, accuracy, or safety of the information, products, or services offered on these external sites. We are not liable for any damages resulting from the use of these links, and we do not investigate, verify, or endorse the content or opinions expressed on any third-party sites. First Federal Bank | Equal Housing Lender | NMLS # 408902
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