Tuesday, May 5, 2009

The Christmas Club Reincarnated

When I was in my early 20's, I used to work for a company that used cavemen as their commercial pitchmen. One of the benefits the company offered was a Christmas Club savings account through its company credit union. The credit union took out $25 from every paycheck until November, and I had over $600 to spend on Christmas. Ahhhh, those were the days.

Just to get off the topic here a bit, after one year of contributing to the Christmas Club, my mom said to me, "Don't worry about nice gifts. You saved that money, you should buy yourself something nice." We were at a chi-chi mall and my mom suggested that I buy myself a Chanel suit with it. I was excited that I would buy a Chanel suit with cash! But my hopes were dashed when I looked at the price tag - over $1,500! Needless to say, I didn't buy the suit. And I still haven't. I don't know why I'm bringing this up other than that every time someone mentions "Christmas Club", I'm always reminded of how my lofty dream was once crushed by the cold tsunami of reality. Ha ha.

Anyhow, I digress.

I've been doing my own Christmas Club savings through ING and my nifty Excel spreadsheet. Although I call it my own Christmas Club, it just isn't the same.

I've since discovered Smarty Pig, which is an online partner of West Bank. Smarty Pig is a bank that offers accounts for people who want to save for a specific goal combined with the social networking ability (similar to that of Mint). Best of all, it's currently offering 3.05% APY and it's FDIC insured!

There's no minimum to open, but if you have a savings goal, you have to start with $25 and your goal must be at least $250. Additionally, if you have a savings goal (e.g., save $2,000 for vacation by 5/1/2011), SmartyPig will will suggest a monthly contribution that will be deducted from a designated funding source. You can make your goals "public" and invite others to help you reach your goal. (Okay, so this part is a bit tacky, but I have to admit, it's a creative twist.)

I often speculate for the highest APY so this looks promising. (I'm sure after a month or so, the rates will plummet, though.) But the best part of all, it reminds me of my good ol' Christmas Club of yore. I think I'll open an account. :-D


Sharon Rose said...

Hi there-excellent idea and the right time of the year to be thinking about saving for Christmas too!

Miss M said...

So is it a bank or not? It doesn't really sound like it, though I do like a good return. I've got like a zillion saving goals going on at any one time. For christmas I just use one of my extra paychecks from a 3 paycheck month and set aside ~half of it.

DogAteMyFinances said...

I didn't know you could ask for donations. That is pretty clever!

Shtinkykat said...

@ SharonRose: Earlier you prepare for X'mas, the better.

@ Miss M: I don't think SmartyPig itself is a bank. I believe it's a partner/facilitator for West Bank. I like your idea of saving 1/2 of one of your 3 paychecks for your Christmas spending.

@ Dog: It's clever, but how do you ask for donation without being tacky? Hmmmm....

Sallie's Niece said...

What a great idea! I made saving for Christmas one of my 2009 goals but I've been slacking. It definitely would help out to have a separate account.

Ms. MoneyChat said...

do banks offer christmas clubs still? i remember those from my childhood.

now, the asking for donations part is a bit uncomfortable for me. i can see how a graduate could get away with that but that's about it. i even think setting one up for a wedding hoovers on the tacky line.