Getting in early to beat Xmas stress
If your bank account and credit card are feeling a bit the worse for wear heading into this Christmas, now could be the time to start thinking about ways to make 2017 easier.
Start planning now, and you should be able to painlessly stretch the cost of the festive season right through the year. Here are some ways to get sorted.
Christmas clubs
Wherever you stocked up for Christmas, there was probably some sort of savings scheme on offer. A number of major retailers have Christmas clubs you can contribute to over the year and then redeem the money, with a bit extra, at the end of the year.
Countdown
Countdown sells Christmas Club vouchers through the year. If you buy them before December 1, you can get a 5 per cent bonus when you use them through December and January.
If you can put aside an extra $40 to buy vouchers with your weekly shopping every week between now and this time next year, you will have $2080 saved, to which Countdown would chip in another $104.
New World and Pak’n Save
New World and Pak’n Save offer a similar system. Shoppers can sign up for a Christmas Club card and then top it up through the year at the checkout or by direct payment from their bank accounts.
If the saved money is not used until December, you get a bonus.
The extra amount varies depending on when in the year you deposited the money – you get an extra 32 cents for every $5 deposited between December 1 the year before and February 29, an extra 27c for funds deposited between March and May, 22c between June and August and 17c between September and the end of November.
The Warehouse
The Warehouse also has a Christmas Club card scheme. If you use it to make purchases from December through to February, you qualify for a 5 per cent discount.
In all of these cases, you can access the money at other times during the year if you need it, but you will not get the bonus. There are no fees associated with joining the schemes.
Christmas savings accounts
Most of the credit unions offer Christmas-specific savings products designed to help you get ahead. You put money aside in the same way you would with any savings account.
But the money is usually locked in until November, although the specific terms vary.
NZCU Baywide offers a $10 bonus deposit when you open an account, and 1.5 per cent interest.
NZCU Auckland has an interest rate of 4 per cent and also gives away three hampers a year.
First Credit Union pays 3 per cent interest.
NZCU South has 7295 members in its Christmas Saver Account, who have saved a combined $4.8 million so far this year. NZCU Baywide has 3000 customers with $2.4m saved between them.
Baywide chief executive Gavin Earle said: ‘‘Unlike retail Christmas Club schemes, our customers can then choose to spend their savings on anything they like to help them over the busy festive season.’’
Hampsta
Hampsta is another locked-in savings scheme. You can choose how much you want to contribute via regular direct debit payments throughout the year.
After December 1, take your Hampsta card shopping at the participating retailers, including Noel Leeming, Briscoes, Toyworld and Mitre 10. Hampsta members can also use their savings to purchase New World and Pak’n Save gift cards.
One of the biggest drawbacks is the fees charged. You pay a $20 joining fee and $39 a year for account maintenance.
On top of that, you do not get a bonus or interest on your savings. If you saved that same $40 a week you would have $2184 in spending power at Countdown by next Christmas; your Hampsta card would only have $2041 loaded on it.
The retailers in the scheme can also change and, in the first year, there is no refund available to people who cancel payments.
In the second year, you will be hit with a $40 cancellation fee as well as the $39 annual fee if you want your money back, or if your direct debits bounce too many times in a row.
Hampsta also reserves the right to charge administration fees if direct debit payments fail.
Christmas hampers
Lots of people are drawn to Christmas hamper options because they seem so easy. Select a hamper you want and pay it off over the year to have it delivered on your doorstep next Christmas.
The downside to this is that you usually pay quite a bit more for items that are available in the supermarket anyway.
Chrisco is advertising a traditional Christmas hamper for next year for $13.95 per week, or $725.40. With that amount of cash saved, you could do an online shop from your supermarket, and have
‘‘Having a hidden account keeps your savings out of temptation’s way.’’ Financial adviser Liz Koh
it delivered, with more flexibility to choose what you want.
Chrisco offers 8kg of chicken drumsticks for $2 per week, or $104. Countdown had 2kg of Tegel chicken drumsticks for $14.99 or $59.96 for 8kg.
This is an issue with most of the hampers available in the market.
Standard savings accounts
If you trust you have the willpower, the simplest way to save for next Christmas is in a bank savings account. You can set up accounts with most banks that have no fees.
A number of accounts offer incentives to people who save regularly and do not withdraw funds.
ANZ has a Serious Saver account that pays 2.6 per cent per year to people who deposit at least $20 a month in their account and do not take any out.
You’ve got control, but you’ll need to trust yourself not to touch it. Financial adviser Liz Koh said this was a good option for many people.
‘‘If you want the most flexibility with how you spend your money but without being tempted to spend it, the best thing is to have it in a separate savings account in the bank but not visible on internet banking, and perhaps in a different bank than you usually use,’’ she said.
‘‘The advantage of the Christmas clubs is they keep your money away from temptation but then the disadvantage is you can only spend the money on groceries from that supermarket.
‘‘Having a hidden account keeps your savings out of temptation’s way while still allowing you to use the money for whatever you want to spend it on.’’