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Start saving for Christmas now

By Marcie Geffner · Bankrate.com
Tuesday, January 10, 2012
Posted: 9 am ET

If last year's holiday season blew a hole in your budget, January could be the ideal time for you to start saving for this year's gifts and festivities.

One way to do that is to open a Christmas club account, according to Katherine Hutt, a spokeswoman at the national Council of Better Business Bureaus, or BBB.

"A Christmas club account is a great savings tool throughout the year and the perfect way for families to get a hold of their holiday spending," Hutt explained in a statement.

Banks, credit unions and retailers offer Christmas club accounts, which help customers set aside small sums every month, until they're ready to pay holiday expenses. Money saved in a retailer's Christmas Club account typically must be spent at that company's stores.

Here, from the BBB, are some tips to maximize the benefits.

  • Start now. The sooner you start, the more you'll save and the more interest you'll earn on your savings.
  • Make a budget. Consider how much you typically spend during the holiday season and use that figure to help you decide how much to save every month.
  • Shop around. Christmas club accounts typically don't pay high interest rates, but the rate and any fees can vary. Compare the terms to find an account that meets your needs.
  • Read the fine print. Some accounts require a minimum deposit to open, require a minimum deposit every month or assess penalties if funds are withdrawn before the holiday shopping season.
  • "Along with taking the time to shop around for the best interest rate, it's also important to read all of the fine print that accompanies such an account," Hutt said.
  • Automate the process. Most accounts allow monthly automatic deductions from a bank account or paycheck. Keep track of these deductions, so you won't overdraft your bank account.
  • Know the deal. Evaluate your holiday shopping plans before signing up for a club with a specific retailer.

Follow me on Twitter: @marciegeff

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