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Christmas Club accounts: many credit unions and banks have them, but are you taking advantage of this valuable budgeting tool?

If not, it may be time to start. Christmas Club accounts, also known as Christmas savings accounts, offer consumers a simple, pain-free way to save money for Christmas. Just open a designated Christmas account at the bank or credit union of your choice and make regular deposits throughout the year to have the Christmas money that you need ready and waiting for you when the holiday season rolls around. Interested? Here are some tips to make a Christmas Club account work for you:

• Shop around. If a bank is going to be holding onto your money for an extended period of time, you deserve to be compensated. Check around to find a banking institution that offers interest on club accounts.
• Know the terms. Often club accounts have a specific withdrawal date. Find out what the policy is at your chosen institution. Do they penalize for early withdrawals or forbid them entirely?
• Make it easy. Set yourself up for success by making the savings process as simple as possible. Set up direct deposit to your club account through your employer or set up an automatic transfer through your checking account. Then forget about the money until you need it at Christmas
• Nickname. If you manage your bank accounts online, go ahead and set up a nickname for your club account. Tag it “Christmas” or something similar, and you’ll have a visual reminder of what the money is for each time you log into your account. You’ll be amazed at how this can motivate you to save and discourage you from borrowing from the account.
• Evaluate yearly. Total up your Christmas expenses each year to determine if you’re saving enough. If not, adjust your deposit amount to reflect the new total that you’ve arrived at.
• Save as a family. Teach your kids about savings by setting up a club account in each of their names. Then encourage them to make regular deposits throughout the year. Review their bank statements with them regularly to keep them motivated.