Fund­ing Christ­mas

Auckland City Harbour News - - NEWS -

It’s a known fact among the younger mem­bers of our house­hold that Fa­ther Christ­mas and his elves work hard all year get­ting ready for Christ­mas.

Last year there was an awk­ward mo­ment when my el­dest ex­er­cised her new read­ing skills and asked: ‘‘Why does this say made in China?’’

I felt tempted to make a joke about Santa out­sourc­ing to lower-wage Chi­nese elves but de­cided against it and the awk­ward mo­ment passed with­out fur­ther com­ment.

Just like Santa and his elves, many house­holds spend all year get­ting ready for Christ­mas through the var­i­ous op­tions that ex­ist for pre-fund­ing fes­tive cel­e­bra­tions in­clud­ing ham­per com­pa­nies, Christ­mas sav­ings ac­counts and card schemes and su­per­mar­ket Christ­mas clubs.

And given that this is the time of year when peo­ple are sign­ing up for next year with ham­per com­pa­nies like Chrisco, it’s a good mo­ment to think about the pros and cons of each of the op­tions.

Or­di­nary bank ac­count: Fee-free and easy to set up at banks, build­ing so­ci­eties and credit unions.

Pros: You can get at the money through­out the year should you need it and as they pay in­ter­est your money should grow in value.

Cons: In­ter­est rates are poor.

Credit union Christ­mas ac­count: Credit unions are like banks but are owned by their cus­tomers.

Pros: Gen­er­ally pay bet­ter in­ter­est than banks, though Aotearoa CU is cur­rently pay­ing 5 per cent. Money saved can only be spent at cer­tain times – usu­ally November and De­cem­ber.

Cons: Money is locked away though in cases of hard­ship the money can be re­leased.

A Hamp­sta ac­count: A sav­ings ac­count with a debit card. Savers drip-feed money in by di­rect debit, and can spend it at stores in­clud­ing Mad Butcher, Noel Leem­ing, Briscoes, Su­per Liquor and Toy­world.

Pros: Al­lows dis­ci­plined sav­ing. Money can only be spent be­tween De­cem­ber 1 and Jan­uary 10. Money is held by Pub­lic Trust so if Hamp­sta went bust it is safe.

Cons: No in­ter­est is paid. Also there is a join­ing fee of $20 and a $39 an­nual fee. In ad­di­tion, Count­down has pulled out so gen­eral gro­cer- ies can only be bought with Su­per­mar­ket On­line.

Ham­per com­pa­nies: The likes of Chrisco put out their cat­a­logues of meat, booze and gro­cery ham­pers and toys. Peo­ple choose what they want and then pay by di­rect debit/AP or credit card through­out the year.

Pros: Tried and tested. The money you give is put be­yond reach and be­yond temp­ta­tion by fam­ily.

Cons: Buy­ers over­pay com­pared to prices in the su­per­mar­kets. If a ham­per com­pany goes bust, cus­tomers may lose some or all of their money.

Su­per­mar­ket Christ­mas schemes: Take Pak’nSave’s card-based scheme as an ex­am­ple. You can save reg­u­larly through au­to­matic pay­ments (min­i­mum $5 each time) or just add money in-store when­ever you can.

Pros: A way to pre­fund food and booze for Christ­mas. You can spend saved money at any time but you get to spend more if you wait un­til November 30 to spend it. Here it gets a bit com­pli­cated. De­pend­ing on when you save each of your $5 con­tri­bu­tions, they are worth be­tween $5.32 and $5.17 when spent af­ter November 30.

Cons: The terms and con­di­tions are too hard to read.

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