Xmas and the Spending Account 2

For the most part you’re going to spend more money during the months of November and December than any other time of the year.

I found this out long time ago in college when every holiday season my Spending Account (explanation of accounts here) would get stretched very thin.

Solution: Spending Account #2

In addition to my other accounts, I created another spending account for myself which would cover only gifts, vacations and general holiday spending. I initially used to just put $20/week (aka $100/month) in this account through automatic transfer. That means during the holidays I had an additional $1,000+ to spend on gifts and going out for the holidays. That extra cash is mighty helpful during these months when spending goes through the roof.

Now I put about 10% of all my income in this account. It pays for vacations and everything without having to worry where I’ll pull that money from.

If I randomly see a great gift at the mall or someone, I can usually buy it without much price consideration thanks to the previous 10 months of savings in the Spending Account #2. Same with hopping on a plane for vacation…the Spending Account #2 takes care of it.

If this season you’re struggling to find where all that extra spending money is going to come from, I’d HIGHLY suggest creating a Spending Account #2 for yourself to make the next holiday season much less monetarily stressful and more enjoyable.

Blog posted on: December 17, 2008

9 comments on “Xmas and the Spending Account 2

  1. Anthony

    That is a wonderful idea. Our company has a thrift club sort of, and I know many employees use it.

    Having one of my own is better though. Now of course, I have to think of a way to keep my grubby hands off the money until Christmas time or another holiday time.

    Thanks for reminding me..

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  2. drivelocity

    Some banks and credit unions offer a Christmas Saver Account specifically for this purpose. My wife just mentioned it to me last week.

  3. Aman

    Good point, works not only for Xmas but year round gift spending. I actually have something similar that I call the “gift” account. With friends getting married, having kids, moving, etc…its almost a regular thing to get a gift. Rather than having to slap a spontaneous charge onto the credit card that I might not have budgeted for, I have this account just collecting a portion of my pay and it just sits there until needed…while in this account, its getting high interest and helps since I can budget for the year what my anticipated gift spending will be.

  4. Alin

    Very good! Indeed it works. But I think you can put those money to work for let’s say 10-11 months. You can always choose the money market funds. In my country (Romania, EU), money market funds do not charge commissions for insertions or withdrawals of money. Instead, they work just as a bank deposit but you benefit from the capital raise anytime without loosing it (like a bank deposit, if you withdraw it before 12 months). For a 1000$ I get somewhere beteewn 5% in 10-11 months… that’s 50$. It’s better than nothing ;) You can check more about here http://think.rentacar10.eu/ where I talk about this kind of investments!

  5. How to save money?

    This is good, but I think there is not need for open a new bank account for saving. We can save it in our home to. It is better than Bank.

  6. Rich

    Personally, if there is a bank account set aside for spending, I think most people will use it. As long as the account is held to be relatively low, such as $100 per month or 10% of your income. Perhaps this is a good idea. It sets spending limits for gifts. If its gone, you know you will have to stop there.


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