Christmas Club Account

I love Christmas it is truly my favorite time of the year. I love giving and receiving gifts. I enjoy the four Sundays of Advent and the Candlelight Service on Christmas Eve. I like Christmas Trees and decorations in other words I really like Christmas. I also like to stay out of debt and that is why Frugal Chick and I plan for Christmas.

We plan our Christmas in such a way that credit card companies do not leave something extra special under the tree for us in January. First we list all of the people we buy gifts for and using past experience we estimate the amount we expect to spend on them for Christmas. We also try to estimate purchases of Christmas Cards, decorations, wrapping paper, lights and miscellaneous items we expect to buy for the coming Christmas Season. We add all of these items together and divide by 11. Do not try to set money aside in December, if you are like us it just does not work. This is the monthly amount we save for Christmas expenditures. Make sure this monthly set aside works within your monthly budget.

Realize most banks have done away with Christmas Club Accounts; however, our recent recession has caused a few of them to revisit this policy. If your bank has a Christmas Club account utilize it, if they do not simply open a new savings account (one with no fees) and use it for all of your Christmas transactions. If the bank limits the transactions in this account simply move the money from savings to checking once every two weeks during the Christmas Season. Or you could open a separate checking account and only use that debt card for Christmas purchases. The trick is you have to keep it out of sight and out of mind so as not to be tempted to use it during the year. In other words REMOVE it from your wallet except for November and December.

We have found that planning for Christmas purchases makes it a much less stressful time of the year. It allows us to enjoy making purchases for those we love without worrying about how to pay for them. Our Christmas financial plan also allows us to give money during the Holidays to those who are in need and to perform random acts of kindness. Next year during November and December have a merry and frugal Christmas.

Frugal Travel Tips

Frugal Chick and I love to travel. If you have the love of travel and the love of saving here are a few tips we have found helpful.

1. Plan your trip in advance there are substantial discounts for airlines, hotels and cruise lines for booking well in advance. Part of planning in advance includes looking online for deals to your favorite destinations, sign up for newsletters etc… to reputable sites. Disney, SmartVegas, and Carnival send us updates on deals all the time.

2. When time and distance permit travel by car, the cost is substantially less than flying. When traveling by car you do not have to deal with the TSA, baggage cost are not an issue, limits on toiletries are not an issue and your luggage does not go missing or get destroyed.

3. Save money for your trip, set aside a few dollars every month until you have enough to take your trip. All the change we collect during the year goes into our travel fund. This is not enough to pay for a major trip, but it certainly helps with gas and food. Also, as we stated in a previous post if a second job can be used to fund a trip that always helps.

4. Always assume that there will be hidden cost when traveling. A vacation is much like tile or hardwood flooring if your house needs 400 square feet of tile you would probably buy 450 square feet of tile. We have been to Disney World, Las Vegas, Los Angeles, Maui, Hilton Head, New Orleans and on a Caribbean Cruise. The only time our budget was even close was on the Cruise. When traveling you will eat more extravagantly than you expect to, you will buy more trinkets than you intend to, you will go to shows and events not on your schedule and you will upgrade despite knowing better. I feel that adding twenty percent to your expected budget is not at all over doing it for a big trip. Travel should only be done after you have established an emergency fund and paid of all major debt excluding your home. Travel with the confidence that when the trip is over the fun memories and enjoyment will come home with you instead of the bill.

Bahamas

Hawaii

Accounting Dude's Thoughts on Forclosures

The housing market had 300,000 foreclosures in January and more keep coming every month. Some foreclosures are due to unforeseen problems, but many are due to irresponsible and immature people.

On our street there are three houses that have been or are in the process of being foreclosed. I keep hearing about people being under water and simply quit paying of their mortgage. This is so short sighted; people give up their homes and relocate their children simply because they owe more on their homes than they are worth. Think about a new car, it is under water as soon as it rolls of the lot. The value of real estate will eventually come back unless of course the property has been defaulted in that case everything that was put into it would be lost.

This problem is threefold:

1.Individuals sought loans with such high monthly mortgage payments that they simply could not sustain paying the rate over a long period of time.

2.Banks issued loans to individuals they certainly should have known could not ever repay the mortgages. The banks then sliced up the bad mortgages and packaged them with good mortgages, insurance instruments, and other assets and poisoned the entire financial market.

3.The government encouraged issuing mortgages to low income individuals, many of whom were not capable of paying off the mortgages.

I feel like if you sign a contract you should do your level best to honor it. One of our neighbors simply quit paying their mortgage and left town, they even left the leased vehicle in the yard. I think one of the biggest problems in our society today is everyone is looking to blame someone for their problems and are also looking for someone to bail them out. Personal responsibility and self reliance are both lost on entirely too many people. Stay responsible, stay honest and stay frugal.