3 Ways to Save for the Holidays Now (and Why You Should)

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Back-to-school shopping is barely behind us, so it might seem premature to start thinking about holiday shopping (despite the fact that some retailers are rolling out holiday merchandise in their stores this month). But the reality is, you should.

Credit bureau TransUnion says 32 percent of us don’t save at all in anticipation of holiday season expenditures, which often burdens consumers with a load of debt at the beginning of the year. There are alternatives to making your first New Year’s resolution “Pay down credit cards,” but you’ll get the most benefit if you start taking advantage of those alternatives now.

1. Layaway: Prior to the explosion of easy credit, layaway was a common retail offering. For a small fee, shoppers reserved an item and paid for it in installments. When you finished paying up, you got to take it home. It seemed like an anachronism in the instant-gratification culture that boomed in recent years, but the economic downturn made stores and customers revisit it. Sears re-launched layaway in 2008, Toys ‘R Us began offering it on pricier toys in 2009 and Walmart brought layaway back this year on toys and electronics after scrapping it in 2006. The big plus to layaway is you’re not paying interest as you would with a credit card. However, you’re still paying a fee — usually around $5 or $10 — just to spend your own money. If you don’t have the discipline to save any other way, though, layaway can be a good option.

(MORE: How Consumers Are Coping: Layaway, More Gardens and Pet Adoptions)

2. Christmas Club: Another older staple of holiday budgeting that’s making a comeback, Christmas Clubs are interest-bearing savings accounts in which you put money each month. Many smaller banks and credit unions have reintroduced Christmas Clubs, and while they generally suggest starting your savings at the beginning of each year to maximize the impact, you can still open one now. A spokesperson from the Independent Community Bankers of America says that member banks are still hearing from people who want to open these accounts now, so it’s not too late. Some retailers also offer Christmas Clubs, but you can only use your savings with that merchant, which limits your ability to shop around for deals when you’re ready to buy.

(MORE: 135 Money-Saving Resources and Tips, Special Holiday Season Edition)

3. Direct Deposit: If you don’t want to go the Christmas Club route, consider setting up your own version by opening a savings account at a brick-and-mortar or online bank or credit union. Many institutions let you set one up with as little as a $5 minimum balance, so shop around for the best interest rate. If you receive a paycheck by direct deposit, see if your employer will let you split the deposit between two accounts. If so, arrange to have a set amount automatically diverted from your paycheck to help fund your holiday spending. This alleviates you from having to remember to set aside money and also stashes it away someplace separate from the account where you pay your monthly bills, so you’re less likely to tap into before the holidays.