The Lost Art of the Christmas (Savings) Club

Growing up, my mom taught me that saving was a very important part of being an independent person. Not only should you have funds for a rainy day, but one should always save for those things one wants and dreams about. Even when we have a steady paycheck or a trust fund, saving should be a part of how we acquire things and maintain wealth. What good is making a lot of money if you spend all of your paycheck before cashing it in?

To prove her point my mother established a Christmas Club account with her local credit union. Believe it or not this is a thing; the Club is a fund that you can contribute to every month in order to save the exact amount you need to purchase Christmas gifts. By October, she would have enough capital in her account to buy the most expensive gifts which she would store until the 25th of December. She would skip Black Friday and last minute shopping altogether because she had the ability to acquire our gifts at full retail price!

For those of you wondering why this is a good thing, my mom would show us how to calculate the amount of money she saved by not waiting in line using her hourly rate as the amount of money she could be making if she was at work. The savings needed to exceed the cost of waiting plus the hassle, which they never did. Coupons weren’t as common back then but she would use Columbus’ Day Sale prices or work related discount rates to save whenever possible. If all went according to plan, there would be money left over to buy additional gifts or to kick start next year’s fund.

Saving became a very rewarding habit.

Due to my love affair with numbers, she’d share the particulars of the account with me; the interest made on the invested cash and the gains accrued over time. She’d let me know how much money was budgeted for my toys, for my sister’s list and for my cousins’, and what would be reinvested or redistributed to other funds. If the gains were high we would purchase a big ticket item like a TV or gaming console in which we all acted as stock holders of the transaction. No one ever had an issue with this method since we knew what we could afford, what we would get, what items were left for surprise buys and how it had been paid for or acquired. There were zero disappointments and resentment since my mom didn’t have to give up her bonus or some other luxury to make us kids happy and resources were pooled for big ticket items. Win-win!

Soon after the Christmas Club was established, she also opened college savings accounts, Disney World vacation and emergency fund accounts. A few months later, she introduced me to home loan refinancing, 401k and retirement funds since every dollar she could spare went to one of those accounts. I will be forever grateful for this lesson because mom never stopped pursuing the things she loved to feed our goals or dreams; she saved to make everything happen.

When the money was short, she would find a way to avoid cleaning out any sort of savings. From overtime to refinancing our home, there was a place where the money could come from that would not jeopardize our plans. The most valuable life lesson she imprinted on me was to save and ensure that my quality of life wouldn’t suffer due to hardship. There was always another way to save; all I had to do was look for it.

Everyone can save.

Saving is an art requiring lots of self control and discipline. It requires that we set a realistic time line and that we live within our means. Most of us fail to understand that saving takes a lot of effort and that to be successful, we cannot borrow against those saving or use the money for other essentials: saving requires that we have multiple pots for different things and that we diversify our investments to capitalize our gains. Money that makes you more money effortlessly is the endgame. Our financial adviser became a part of our family and his firm made sure we had all the information we needed to invest and diversify. We each helped finance our own goals and dreams, becoming responsible for the monies put into a particular account. Every small dividend and capital return accumulated over the years and became enough to pay our way through college or to buy our first home. I still have the mutual fund my mom set up for me to attend engineering school, and I even used some to pay for my wedding dress and my first down payment on a car.

This saving and investing philosophy helped me weather 8 months without a job. I could look forward to being at home instead of dreading it financially. I had the cushion necessary to find a new job, one that benefited my career. I was in no rush and in no danger of losing my home. Throughout the layoff saving became my motivation, what helped me sleep well at night knowing that, regardless of what transpired, my family would be able to weather the storm.

Having multiple saving avenues may not be your thing but I do urge you to consider at least having one savings account with a purpose other than overdraft protection. Layoffs, deaths in the family and even accidents can be unpredictable but since we know they can happen there is no reason not to save for the occurrence. That’s the hard part of being an adult, realizing we must be prepared for the eventualities of life instead of ignoring them and wondering later why we failed to protect ourselves from hardship. Squirreling money away is a super power I have developed over time and a skill that every person should attempt to master. Try it for a while. Start by pooling resources for a new video game or a better make up brand or go all out and research Christmas Clubs or mutual funds. No amount is too small when it comes to saving.

Dream big, save bigger. 😉