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Save now for Christmas

Collecting spare change can help

'I collect £2 coins'

Sarah Foulger, who lives in south London, says she always keeps any £2 coins she gets and puts them in her 'Christmas jar'.

"They build up quicker than you can say Jack Flash," she says. "Every couple of months I change them into euros so that I can't spend them. Before I know it I have lots of money that I can spend at Christmas.

"The odd thing about £2 coins, though, is that if you get one in a day you'll normally end up getting three or four in the same day. But then you can go for weeks without getting any! It's a bit hit and miss but over the year it really works. My brother collects 20 pence pieces which works for him but it takes him longer to save."

Do your Christmas shopping now
Savings accounts
The Post Office savings scheme
Credit Union
Collecting coins
Collecting supermarket stamps
Buy things early

If you want to spend at Christmas, but you don't want the debt misery that so many of us have in January, then saving through the year is the way to combat it. There are so many options now, too. Use savings schemes, cash in a jar or just pick up actual goods during the year - whatever works for you. The one thing we recommend you don't do is join a Christmas hamper club where your money is not safeguarded (remember the Farepack fiasco in 2006?) Have a look at these alternatives and you could have Christmas 2008 sorted by November:

Do your Christmas shopping now

Shop prices tend to go up and up the nearer we get to Christmas so look out for any special offers, sales and BOGOFs (that's buy-one-get-one-frees) now. You could end up saving yourself lots of money, plus you can feel smug amongst the stressed-out shoppers in December because you'll have most of your shopping out of the way.

Christmas decorations - It may sound unlikely but you'll still be able to find decorations in some shops that are leftover from last Christmas. Try pound shops and bargain bins - you'll get some fantastic discounts and have a look at the online clearance sections of department stores like John Lewis.
Gifts - Amazon is always worth a look for bargains. At the moment you can get this outdoor WWE micro scooter for just £18.97, or get 60% off this Groovy Chick backpack safety set for any adventurous daughters.
Jewellery and Watches - Get some great deals at H.Samuel. Save 20% on diamond solitaire and eternity rings as well as buy- one-get-one-half-price on all earrings and pendants. You can also make big savings on all kinds of trinkets, watches and jewellery in their current sale.
Christmas booze - Get the Christmas spirits now (but try not to drink them now). Join the Tesco Wine Club for free and enjoy a host of special offers and earn clubcard points on all your purchases. They are delivered right to your door so there's no lugging them home from the shops.

Savings accounts

The best way to save in the run-up to Christmas is to put regular amounts in a high-interest savings account where your money is safe and where you are making interest on your savings. We recommend online savings schemes such as ICICI bank, which is a top performer at 6.41% AER. There is also the Icesave account at 6.75% and the Abbey e-Saver Direct at 6.50%. With these you can put in as much or as little as you like each month. They're fully flexible, but you do need to have the discipline not to take the money out early!

The Alliance & Leicester eSaver is a good choice if you can trust yourself not to touch your loot. It pays 6.5% AER, but only on the months in which you don't make any withdrawals.

Also, a few building societies have set up actual Christmas savings accounts. The best one is Skipton Building Society which gives you a great 6.80% interest on your money. However, you have to put in a minimum of £10 a month and maximum of £250 a time. The account matures on 25 November when you also get the interest you've made through the year. You have to put the money in over the counter at one of their branches or by post.

The Post Office

The Post Office has its own 'Christmas Club' savings account which anyone can open. It doesn't offer any interest on your savings but it does guarantee that your money is safe. The way it works is that you get a Christmas Club card which you can use to make deposits over the counter at any Post Office. The minimum deposit is £5 and the maximum individual payment is £500, up to a total of £1,000 per card per year. So if you wanted to save more than £1,000 for Christmas this is not the best option for you. Although you could always combine it with another savings scheme if you wanted to.

One good aspect of this scheme is that you can't touch your money until November when the card turns into a pre-paid debit card which you can use in certain stores or turn into gift vouchers. The Post Office has done deals with more than 200 retailers so far, including Argos, Boots, Debenhams, Halfords, HMV, House of Fraser, Peacocks, Sainsbury’s, Thorntons, Woolworths and WHSmith.

Credit Unions

Credit Unions have had Christmas savings accounts for years. Their rates are pretty competitive and you can put as little as £1 in each time you make a deposit. They pay an annual dividend on your savings but you can take money out during the year if you need to (try not to!) As with the Post Office and with banks and building societies, your money is protected under the Financial Compensation Scheme (i.e. the first £35,000 of your savings is safe whatever happens to the Credit Union). Credit Unions are worth joining anyway, even if you don't open a Christmas account, so have a look at the national website to find one near you.

Collecting coins

It's simple and it's old-fashioned - but it works. Pick a coin that you would like to collect and then at the end of every day, or at the end of the week, put any that you have in your wallet into a jar or piggy bank. You could simply put all your copper change in, or pick one coin - say 20 pence pieces or £2 coins. If you do it every week it's amazing how much you can save over a year.

The downsides of this method are that a) you don't make any interest on your savings, b) someone could take the money, and c) you could dip into it in times of dire need (like needing new shoes or to go to the pub). So it may be best to combine this method with one of the suggestions above. At the end of every month, collect up the coins you have saved and haul them off to the Post Office, a Credit Union or a building society. That way you will earn some interest and the money will be safe from pilferers (including yourself!).

Collecting supermarket stamps

A number of supermarkets, including Morrisons, Asda, Tesco and Iceland, have what they call 'Christmas clubs' where you buy stamps throughout the year and redeem them against food and gifts in December. Again, as with collecting coins, the main drawback is that you don't get interest on the money you save. However, it's specifically for Christmas and it will help you save if you think you're in danger of dipping into your special savings pot. It's also quite a handy way to do it because you can buy a few when you do your shopping each week. If it works for you, then do it!

Buy things early

It doesn't just have to be money that you save through the year. Start with any sales that catch your eye throughout the year and buy items for Christmas as you see them on offer. Christmas decorations, cards and gifts are marked down from just after Boxing Day and then after that you can pick up presents in sales and non-perishable foods (mincemeat, pickles etc.) through the year which can go in your 'Christmas cupboard' ready for December. Of course, though, this only works if you have space to spare. Not all of us have!