Saving for Christmas

A few years ago, I decided to take the stress out of this spending. Every payday, I put money into a savings account and most weeks I top up my supermarket Christmas Club account.

It’s been a game changer.

There are various Christmas savings plans on offer. However, not all these schemes offer a cracker deal. Here are your options.

Chrisco

Chrisco is the big player in the Christmas hamper world. It offers a selection of festive hampers. You choose one then spread out the payments until you cover the cost. The earlier you sign up, the cheaper the weekly hit.

You’ll pay a lot more for the groceries than if you’d bought them at the supermarket, though. Chrisco’s Mega Christmas hamper costs $985.40 but we bought a similar basket of goods at the supermarket for $756.80 – a saving of more than $200. We saved more than $170 on the Kiwi Favourites hamper, which will set you back $774.80.

Another downside is you can’t choose what’s in your hamper and might not want all the items – peanut butter and Weet-Bix may not be top of your festive shopping list. Also, everything turns up at once, so you have to find room to store everything, including the meat and 15 packets of frozen vegetables and fries in the Mega Christmas hamper.

As well as hampers, you can also spread payments on other goods such as toys, electronics and gift cards.

The company also offers a “Headstart” plan, where you make refundable payments to next year’s Christmas before choosing a specific hamper. But as soon as you commit to one, its cancellation policy applies.

Our verdict: Although it’s convenient, Chrisco is expensive. Even if you paid for your groceries to be delivered from the supermarket – it’d still be much cheaper.

Supermarket clubs

Countdown, New World, Pak‘nSave and Four Square’s South Island stores issue Christmas club cards. You top them up at the checkout, or you can arrange regular bank payments. Cards can be registered, which means you can deactivate it if you lose it.

Cards are valid at any store, but they can’t be used for online shopping, and there are some things you can’t buy, such as tobacco.

Countdown’s offering has replaced its voucher scheme. You can spend your savings anytime, but you’ll get a five percent boost if you buy with the card in December and January.

With the other schemes, the earlier you start saving, the greater your bonus. Every $5 saved before 29 February gives you an extra 32¢, decreasing throughout the year to 17¢ between 1 September and 30 November. You can use your card anytime, but the bonuses aren’t credited to your account until December.

FreshChoice supermarket also has a Christmas Saver Plan where you set up a direct debit or automatic payment. You can use this saved amount from 1 December to 31 March and get a five percent discount on the costs of your saving plan – for every 95¢ spent you receive $1. However, you can only spend it at the supermarket where your plan is registered. This makes it less flexible than other supermarket plans.

Our verdict: Supermarket Christmas clubs are better value than Chrisco hampers. If you put away $15 a week for 40 weeks, you’ll have $600 plus bonuses. You can choose the goods you want (although some clubs exclude items such as tobacco and gift cards).

If you don’t spend it all, you can use it the following year.

Christmas clubs

There are two main providers: Hampsta and The Warehouse.

With both, you make payments throughout the year by direct debit or automatic payments. At The Warehouse you can also top-up in-store. Hampsta lets you make payments at some retailers (Mad Butcher, Noel Leeming or Super Liquor).

The Warehouse card can only be spent in-store (not online) at The Warehouse and can’t be used to buy gift cards. You can use your Hampsta card in-store at 18 chain stores, including Briscoes, Rebel Sport, Toyworld and the Mad Butcher, or buy gift cards from Hampsta’s website. But there’s no guarantee the retailers will stay the same throughout the year.

The Warehouse gives you a five percent discount, even on sale items. It also has a VIP day with an extra 5 percent off purchases made with club funds. The Warehouse card has no fees, but Hampsta stings you a $39 annual fee and $40 if you want to cancel (you can’t cancel in the first year).

Hampsta rewards you with $10 for every new member you refer. Active paying members can open a Junior Savers account for their children 16 and under. This account has no annual fee.

Access to your savings is limited to a “redemption” period – The Warehouse is from 1 November to 31 December, Hampsta from 1 December to 10 January. After this, your savings are locked away for another year.

Our verdict: The Warehouse card is better value than Hampsta – it has no fees and a discount, but you can only use it at The Warehouse. The Hampsta card offers more variety but you automatically lose $39 with its annual fee and it doesn’t have bonuses.

Savings accounts

Another option is a savings account that rewards you for adding to your balance and not making any withdrawals.

Most banks offer a bonus saver account, with no monthly fees. The accounts offer a low base interest rate but give you a bonus if you don’t take any money out and make a regular deposit (although interest rates are currently low). Each bank has different terms and conditions and you may have to meet other criteria, such as having a transaction account with the bank, to be eligible.

Some credit unions have no-fee Christmas accounts where you earn interest. You set up regular payments or contribute when you have spare cash, but you can only get your hands on the money in November. Unity Christmas Saver account kick-starts new accounts with $10.

Our verdict: Bank accounts are flexible – you can decide what you spend your money on, and the cash is there in case of an emergency. However, interest rates are currently low so if you’re just wanting to save for groceries, a supermarket club gives better returns.

Cancellation costs

What happens if you change your mind or want a refund on what you’ve already paid?

Chrisco gives you a fee-free 21-day cooling-off period. After that, you may forfeit 20 percent of what you’ve paid (up to a maximum of $250). If you can’t keep up the payments, the order (in products or vouchers) will be reduced to the amount you’ve paid.

Countdown, New World, Pak‘nSave and Four Square let you use your vouchers or balance early, but you won’t get any bonuses.

FreshChoice lets customers end payments at any stage, but they won’t be able to get their contributions until the end of November. Amounts aren’t refundable in cash, except in exceptional circumstances.

The Warehouse has a seven-day cooling-off period and you’ll be refunded any money you’ve paid during that period. After that, you’ll need to wait until November.

Hampsta has no cooling-off period and you can’t cancel your membership in your first year before 1 December. After you cancel, you’ll get what’s remaining once the $40 cancellation and $39 maintenance fees have been deducted. In the case of financial hardship, Hampsta may refund your money (but will still charge the cancellation fee).

Is your money safe?

Chrisco is a form of lay-by, so if it goes into receivership you’ll be a creditor with priority over unsecured creditors. However, when a company goes bust, there’s often no money left to pay out.

Hampsta has the funds held separately with The New Zealand Guardian Trust and retailers are reimbursed directly from the account.

The supermarket clubs and The Warehouse club have the funds held by their parent company in a separate bank account or under a separate company.