Planning for the 2011 Holiday Season

So we're (barely) keeping our heads above water this holiday season thanks to the use of rewards points to buy some Christmas gifts and a couple other fortunate circumstances (a small inheritance and having a 1 year old for whom I don't have to buy an airline ticket when we fly to the US for Christmas). However, as much I have been scrambling this holiday season trying to keep costs under control, it has made me think that I want to try and budget for next year starting immediately. Next year, my one year old son will be 2 years old, and he will no longer be able to fly free. So that means we will need approximately $1000 to fly our family of four to the US to visit my husband's family. That's a significant amount of money to spend each December, in addition to buying presents for everyone. However, because it's a predictable expense, it makes sense to try and set aside the money each month. So, to that end, I set up a high-interest savings account (HISA) with Ally. Ally's HISA has one of the highest interest rates (2.00% compounded daily) of the banks I researched. Most of the big banks offer just above 1%, and other online banks pay approximately 1.5%. I like the idea of the online banks mainly because it's a safe place to park your money as you are working towards a goal, and the money is not easily accessed (reduces temptation!).

The goal is to try and sock away approximately $100/monthly out of my regular pay cheques. It may or may not be feasible to put this money away each month. When my tax return comes in (May), I will try to put a chunk of cash ($500?) into the HISA to help me achieve my goal. Hopefully, this was greatly reduce the financial crunch next year, as our expenses and debt payments will continue be significant factors until February of 2012.