The Christmas season is one of joy and togetherness, but for some people, it's also one of economic hardship and difficulties. Having a financial plan in place to cover shopping expenses may not help reduce the stress, and it will give people more peace of mind during future holiday seasons.
Looking into opening an account for next year's Christmas and Hanukkah shopping may seem like a long way off, but it's never too early to start saving. Finding a solution that works for every person will be the tricky part.
Strong financial investment advice would recommend getting a specialized holiday savings account. Which Online wrote that these accounts offer automatic paycheck deposits of a specific part of a person's check every time they get paid. Others have a cap on the total amount that can be set aside each month while the account is active to maintain financial stability. What's more, these specialized savings accounts offer higher interest rates than standard offerings, meaning that while these are active for a much shorter duration than a regular account, consumers that start earlier in the year and save more aggressively will see moderately higher payouts when the time comes.
The problem with a holiday savings account is that, no matter how much is deposited, consumers can't withdraw these funds until a specific date, usually sometime in late November or early December. While this ensures that money meant for the holidays isn't frivolously spent during the year, it means if an emergency were to arise, a person would have to pay a penalty on the withdrawn funds to gain access to them.
The Argus Leader wrote that one of the biggest mistakes that consumers make with saving for the holidays is that they don't start early enough or use wise financial planning in their deployment. If opening an account isn't an option, then starting to shop earlier should be something consumers should look into, since that will provide more options and a better chance at special savings. The source also recommended setting aside a specific amount for each person on a holiday shopping list and being firm in not spending more than that limit.