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FORT LEONARD WOOD, Mo. — With another holiday season behind us, many Americans are now trying to dig their way out of the debt they accrued spending money on gifts. In 2020, that debt averaged more than $1,000 per person, and a large majority of people reported they wouldn’t be able to pay it off in January, which usually means interest charges and more debt.

Wouldn’t it be nice to have money already set aside for the holidays every year? A slight bit of planning can go a long way. Instead of getting caught with a cash shortage come year end, consider stockpiling money all year for gifts, travel and family get-togethers via a Christmas or Holiday Club account set up at your financial institution.

While club accounts were more popular in your parents (or grandparents) generation, they still exist today. They’ve stood the test of time because the holidays return every year, seemingly with more elaborate celebrations and larger, more expensive wish lists.

Here’s how club accounts work: You make consistent payments (weekly, bi-weekly, monthly, quarterly or however you set it up) into the savings account with the intention of pulling out the cash around Nov. 1 each year. Essentially, these accounts exist to save you stress when the holidays approach.

Contributing to a club account is a hands-off way to build a positive habit of saving. You’ll quickly see that every little bit adds up, and spreading out the expenses across the entire year makes the holidays much more manageable. It might even help you avoid credit card debt if you have a tendency to overspend around the holidays. Plus, it feels like a bonus at the end of the year when you access all this cash you probably didn’t feel was missing in the first place.

No matter how ready we think we are for the holiday season, December always seems to arrive at lightning speed. Now might be the perfect time to put a new plan in place with the goal of avoiding a big credit card balance come next January.