“Ho ho ho” or “boo hoo hoo”?

Christmas. If you’re reading this between January and June, I’m sorry to bring it up so soon. If you’re reading this between July and December… IT’S NEARLY HERE!

Christmas is portrayed as a great time of family get togethers, fun, excitement and goodwill to all. However, for many people Christmas can be a time of financial stress, money problems and even tip people over the financial edge. Here’s an idea how to survive Christmas – at least from a financial point of view, there’s nothing I can do about the in-laws coming to stay I’m afraid.

Save for it

Let’s face it, Christmas shouldn’t be a surprise. In fact I bet you can tell me the date of the next 20 Christmases. Knowing that it comes around one a year, it’s surprising that more people don’t save up for it. But how to do it?

Don’t use any of the commercial “Christmas Saving” companies unless you have a particular reason to do so. They are run to make a profit, so you won’t get any interest or bonus on your cash, and if they go bust (as happened 10 years ago with a company called Farepak) your money is not protected, you might be subject to a hefty penalty if you stop contributing or need your money back early, and you’re limited as to what you can spend it on to the retail partners these companies have deals with.

If you’re disciplined, you could find yourself with the same amount of Christmas money that you’re free to spend anywhere simply by putting the money aside each month. But for savvy savers there’s a better way.

Get Unionised

Credit unions are non-profit financial co-operatives run for the benefit of their members who save money with the Union and can access fair borrowing rates if they need a loan. Many of them offer specific Christmas Savings accounts. Crucially these are fully protected under the same government compensation scheme that protects our money saved in banks and building societies, and many of the accounts offer a dividend rate so that your money actually works for you while you save.

As an incentive to keep the savings going, some of them will charge you a fee if you withdraw before November of each year, or you fail to keep regular savings coming in – but in most cases this is around £5 or less.

If you know you lack the discipline to self-save, then opening an account with a credit union and setting up a regular transfer from your wages is a great way of spreading the cost of Christmas. If you save £25 a month between January and November you’ll have at least £275 to spend however and wherever you like in December without having to trouble your credit card or overdraft.

For more information on how the My Community Bank Network works and to find one you could join click here