Christmas almost inevitably leaves most of us with a hangover, and as we tuck into the last of the turkey leftovers, we'll all be feeling the effects of this year's excesses -- and not least on our finances.
I fear that for many of us our debit cards, credit cards, and bank balances will have taken a battering.
In fact, for those who haven't saved for Christmas, figures from the Halifax suggest that the average amount of debt that a person expects to have for all festive spending is £449.
But even more worrying is the fact that things look set to get worse as the recession bites in 2009. So it makes sense to think now about how you are going to fund next Christmas.
Get Into The Christmas Savings Habit
Christmas represents a major financial commitment for all of us, but the key to giving yourself a head start for next year is to kick off your savings plan right away.
If you are able to commit a regular amount to a savings account, no matter how small or large, you may be surprised at how quickly your savings grow.
In fact, put away as little as £50 a month, and in 12 months you will have accumulated a Christmas spending pot of £600-plus which will make Christmas 2009 much more palatable; put away just £25, and you will still have a healthy £300.
Pick A Best Buy Account
Even though the rates paid on savings accounts have been decimated by huge base rate cuts over the last few months, there are still a host of regular savings accounts paying rates of around 6 per cent, according to Moneyfacts -- provided you save a minimum or fixed amount for 12 consecutive months.
- Abbey, for example, is paying 6 per cent a month on its Fixed Monthly Saver 8 into which you can put between £20 and £250 per month.
- Principality building society is also paying 6 per cent on its Regular Saver Bond Issue 6, with the same lower limit of £20, but with a higher upper monthly limit of £500 per month.
- A further option is Barclays which is paying a slightly lower 5.84 per cent on its Monthly Savings account into which you can put between £20 and £250 a month.
- Elsewhere, Skipton building society has launched a dedicated Christmas Saver account. Paying a reasonably competitive rate of 5.3 per cent, the account allows you to stash away any amount between £10 and £250 per month. Note, however, that with this account you cannot make any withdrawals until November 24 2009, at which time the interest and account balance are moved to an Instant Access account, ready for your 2009 spending spree.
Don't Be Deterred From Saving
Many of us are nervous about putting our faith in savings institutions, having had our fingers burned by the collapse of the likes of Northern Rock and Icelandic bank, Icesave.
But with the spectres of recession and redundancy looming large, it is more important than ever for each of us to have a safety net.
The good news is that under the UK's Financial Services Compensation Scheme (FSCS), your savings are protected up to a limit of £50,000 per person, per authorised institution -- so providing you spread your money around, you shouldn't have to resort to stashing your cash under the mattress.
Further, in many cases, the same applies to overseas savings institutions, although some do operate under what is known as a "passported" scheme, which means that in the event of the provider running into difficulties, you would first have to apply to that country's government for compensation.
What About Christmas Savings Clubs?
While the memories of the collapse of Christmas Savings firm Farepak in 2006 may still be fresh in the minds of those who had been investing in the company each month as a way of spreading their payments on festive food and gifts, the sector has worked hard to improve its image.
As a result, savers in Christmas clubs now have more security -- provided the organisation is a member of the Christmas Prepayment Association. If it is, and the the club you belongs to goes bust, you will now get the value of your investment back in vouchers and goods.
Nonetheless, there are better options, such as the savings accounts I mentioned earlier, plus another alternative that might not have crossed your mind -- a credit union.
Credit unions, which are owned and controlled by their members, offer a range of safe and easy savings schemes for all sorts of needs, including Christmas, and also offer the back up of the FSCS. For more information go to www.abcul.coop
A Regular Saver Account Is Not Just for Christmas
A regular saving account is an ideal home for your longer term savings, irrespective of whether you are saving for next Christmas, or for your next holiday, or for a new set of wheels -- or just for a rainy day.
All you need is the patience and discipline to save every month.
But as a final word of warning, before committing to any regular saver, I'd strongly advise you make sure you know the full terms and conditions, as these accounts will commonly have investment, term, withdrawal and payment restrictions.