Christmas is a little over 9 months away! Have you started planning your spending budget? I’ve been using SmartyPig goal planning financial system for the last four years to prepare our holiday expenses. Planning for the holidays allows you to relax and enjoy time with friends and family. We set a gift amount for each loved one we purchase for, fixed budgets for our holiday parties. After our holiday budget is set, we use the SmartyPig goal planning financial system to set up our savings plan.
Do you remember the Christmas Club programs our parents used when we were growing up at their local banks? SmartyPig is a modern take on Christmas Clubs. Christmas Club programs are still alive and well at small local banks and credit unions.
SmartyPig Goal Planning
SmartyPig goal planning financial system allows you to set a budget for the holidays, vacation, or other expenses. Not only does the website help with goal planning, but it also offers high yield savings rates. The site is currently paying a 1.8% APY on savings accounts. To put this into perspective for you, WellsFargo is now paying 1.55% (thanks to a special rate promotion), Bank of America is paying 0.03% APY, and the average bank is paying 0.06% APY. APY is defined as Annual Percentage rate, otherwise known as interest.
Setting up a SmartyPig account is simple. You’ll create a name for your goal, a target date to meet the goal, and a target amount. Once you’ve selected the options that work best for you, you’ll then choose a recurring deposit option. You’ll set a recurring deposit for the account as either monthly or bi-weekly. I set it up so the deposits match my paydays.
The average American household spends $700 on Christmas and the holiday season. For this example, I set a holiday budget of $700.00, and a target withdrawal date as 11/29/19. In this scenario, the monthly deduction will be $87. SmartyPig will ask for you to make an initial deposit of $10.00. We build the Christmas deduction into our monthly budget and renew the savings plan each November. At the end of the savings term, you will have earned $13.28 in interest. I’d suggest rewarding yourself with Chipotle while you’re out shopping for your Christmas gifts.
I know you’re probably thinking, I can’t afford to add another expense into my monthly budget. But, will you at least try? Wouldn’t you love to be a little less scattered and a little less stressed about money at Christmas? How do you currently plan for your holiday expenses?
We also regularly use SmartyPig to fund our yearly beach trip.
Financial Fridays is a series of unsolicited but much needed financial advice. Read other financial posts by clicking HERE.
- Amanda is a native of Richmond, VA. She enjoys writing, blogging, traveling, shopping, and spending time with friends and family.