Christmas Club Accounts

December comes with a variety of additional expenses that can really break your budget if you haven’t been saving up for them. Between buying gifts, hosting parties, and traveling to visit family, you can easily spend hundreds, or even thousands, of dollars. Unless you have been saving money throughout the year, you will probably end up putting these expenses on a credit card. You could be stuck paying for this year’s Christmas gifts next year or longer, and the interest expenses will add up. Instead of going into debt next year, consider opening a Christmas Club account to help you reach your savings goals.

A Christmas Club account, also known as a Carefree Savings account, is a savings account. You can open this type of account anytime during the year. By opening the account at the beginning of a new year and setting up automatic contributions, you’ll accumulate the most money. At the end of the year, usually in October, you can withdraw the money saved and all of the accrued interest and use this money to cover your holiday expenses.

The main advantage of a Carefree Savings or Christmas Club account is that it forces you to save money throughout the year for your holiday spending and separates it from your everyday accounts. You may be less likely to dip into that account than if the money was in your regular checking account or stashed as cash in your home. This type of savings strategy can help you avoid accumulating credit card debt while doing your holiday shopping and paying for various winter expenses.

If you would like to learn more, visit www.bankoftennessee.com/carefree-savings