Christmas Savings Clubs are on the increase in these straightened times according to reports. Despite the collapse of Farepak three years ago, people in their thousands still entrust their hard-earned cash to Savings Clubs up and down the country.

We’ll return to the subject of Savings Clubs in more detail at a later date, but why is it today that everything, including saving, has to be so complicated when it is at its core such a simple matter?

Saving is the simple act of setting aside a proportion of income for a specific or non-specific purpose. In the case of a Christmas Savings Club, obviously that means saving money for Christmas.

One of the reasons that commercial Christmas Savings Clubs work, despite the poor value they represent because savers are effectively paying for someone to save for them, is because those individuals who save with them cannot trust themselves not to spend the money they set aside throughout the year.

Now for such individuals there is clearly no point in us suggesting using a simple money box or a basic Bank or Post Office Savings Account despite the fact that they offer better value, because such individuals could not be trusted not to raid them when things get tight.

There’s clearly also no point in suggesting a psychological device as simple as ‘deducting’ a weekly or monthly sum from their cheque book stub so that that sum appears to have been spent, but actually leaving it in their bank account and simply keeping a separate track of the running total. In other words spending the money on paper, but not actually spending it at all (pretending to spend it), although the fact that having spent it on paper means that they cannot spend it again because one can only spend any amount of money once. Confused?

Okay then, what about the simple, old-fashioned Tontine or common or garden family savings club whereby one elects a trusted family member - generally someone in their Third Age - as the treasurer, and everyone gives them an agreed weekly sum to put aside for them?

In days gone by, whole families saved towards Christmas in this simple but effective manner. Starting in the first week of January, each family member would give their mother, father, grandparent or whoever was elected as treasurer, that weekly cash sum. It would be recorded in a simple notebook, and withdrawn and redistributed at an agreed date generally a couple of weeks before Christmas. How complicated is that? We’ve even known whole villages to adopt the Tontine method of Christmas saving.

Because it’s an agreed (and affordable) weekly sum, everyone knows exactly how much they will have saved and therefore how much is due to them when the time comes to cash in their savings.

Because there are numerous savers and everyone likely to know the other’s business, it is that much harder to fall off the wagon because everyone else is likely to know.

You can buy your Christmas goodies with ‘real’ money, getting the best value for your savings without paying a premium as you do with traditional Christmas Savings Clubs.

It’s a no-brainer surely!

Join the forum discussion on this post - (1) Posts