I heard on The Today Show this morning about a Christmas Savings Plan program being offered at Toys R Us. The hosts were going on and on about what a great idea it was. Here’s the scoop:
The Christmas Savers Club helps you start saving money now for the holidays. Sign up for a free Christmas Savers Club card (not a credit card). Then make regular deposits at the register. This helps you save up gradually for the holidays without breaking your budget. Best of all, a balance of 3% will be applied to your card automatically on October 16. Then beginning October 31, you can use your Christmas Savers Club card to shop at Toys R Us and Babies R Us instore or online.
In theory, this sounds like a great idea. Start setting aside money now. Get a 3% bonus. Get to shop the sales. Your card never expires. But is it really the best idea? A few drawbacks:
- You can only add money at Toys R Us stores which means you actually have to go there to make your deposits.
- The 3% bonus is added on Oct. 16 regardless of when or how often you deposit money.
- All the money you save has to be spent at Toys R Us and/or Babies R Us.
- Toys R Us gets to keep your money because you can’t use the card until Oct. 31. This is how they can afford to give you a 3% bonus. They will be investing your money in funds that yield greater than 3%.
An Alternative
If you are disciplined enough to start saving now for Christmas, there are lots of greater options available than the TRU Savers Club. I would strongly recommend sitting down now and deciding on a Christmas budget. Then figure out how you can get there. For the sake of round numbers, let’s say you decide on a budget of $500 for Christmas this year. With 5 months until December, you’d need to save $100 a month. That’s $25 per week or $50 per paycheck if you are paid twice a month.
Instead of driving down to TRU and giving them the money, I would recommend looking for a no-fee, high-yield savings account. Stan and I prefer ING Direct because it’s free and easy to transfer money between them and our credit union. Plus you can set up as many accounts as you’d like. But find what works best for you.
Keep in mind interest rates in general are pretty low right now. You won’t earn a huge amount of interest in the course of 5 months but the money will be set aside. And out of sight = out of mind, right? This way, your money earns money for you and you have the option to spend it anywhere you’d like. Remember the killer Amazon toy deals last year? You might not want to have your money tied up at Toys R Us!
However, if you know you will be shopping at Toys R Us for many of your gifts, make a trip there on October 16. As long as you make a deposit by 11:59pm Eastern Time that day, you’ll be eligible for the 3% bonus. But keep in mind how little 3% really is: a $100 deposit would only earn you $3. It is worth the gas to get to TRU for an extra $3?
What are your money plans for Christmas? Have you started thinking about it yet?
Shellie loves to share her frugal finds to help you get more with less. A spender at heart, she balances her frugal lifestyle with the occassional splurge.
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Yes, it’s already on my mind and I’ve started hunting now for deals so I can put stuff away. I’m a newly single mom, so I’m going to need to get creative this year! I’m also new to couponing, so I have no idea of what I should be watching for or expecting for deals in the coming months for Christmas. You mentioned Amazon toy deals…is there anything else we should know about how to get the best deal on gifts and toys in the coming months? Any Christmas in July advice you can pass along is much appreciated!
P.S. To answer your question, I don’t think it’s the best deal unless you have very little will power when it comes to saving money and there is a Toys R Us on the way to somewhere you travel to regularly.
It is a great idea to start saving now for Christmas. Though I don’t want to be thinking about the holidays in the summer; planning ahead is a good thing.
When that time comes it will be less stressful. Thanks Shelly .
Thanks for the info., Shellie!:) We’ll have to come up with some kind of plan for Christmas ideas for our 3.
Also, on an unrelated topic, if you have any money saving ideas how we can take our kids to Disney World , please let me know.
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