Now that the holiday season is over, we can forget about all the mayhem and expenses that accompany our yearly festivities, right? Not so fast. Planning ahead and thinking about next year is a great way to minimize the crunch holiday gift giving puts on your bank account and credit cards. By opening a special “Christmas Club” savings account this January you can spread the holiday expenses over the course of the year, making them much easier to manage.

We’ve all been there. Holiday shopping for friends and family ends with considerable credit card expenses and the associated interest rates that accompany them. We don’t want to skimp on gifts for our loved ones, so we place ourselves in a financial bind to make sure the Christmas tree is overflowing with brightly wrapped packages. But you can eliminate the use of credit cards and the huge blow to your checking or savings account if you put aside a certain amount each month of the year for use towards holiday gifts.

Special purpose savings accounts are available through many reputable online banking institutions, such as ING Direct. Automated fund transfers can be set up to automatically transfer a specified amount of your paycheck into these accounts. Place your planned holiday purchases into a budget. Divide the lump sum by 12 to determine the monthly savings amount needed to reach your goal. For instance, if you plan on spending $1,800 on next December’s gifts, your monthly allocation will be $150, a much easier sum to swallow a little at a time.

Responsible financial management doesn’t mean that you have cut gift giving out of your yearly budget. With a dash of planning and a pinch of foresight, you can build a recipe for a great holiday season.

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