Christmas Savings Program: Everything You Need to Know
With the holidays rapidly approaching, some employees might be stressing about all the holiday shopping they need to do. A great way to prevent that additional holiday stress is to start a Christmas Savings Program, or a Holiday Savings Club, at your business. This program was started in 1909 by Merkel Landis of the Carlisle Trust Company and had each employee contribute $28. The programs continued to thrive until the 1970s, when their popularity weaned. At Canal HR, we value these programs and believe every business should offer them to its employees.
Keep reading to learn more about how these programs work and the benefits they provide.
What is a Christmas Savings Program
These programs are ways for employees to save money throughout the calendar year. The programs are possible by automatically deducting deposits from their paychecks. Then, right before the holiday season, the lump sum is given back to the employee. These programs allow employees to save money for the holidays throughout the year without having to think about it, but there is also a double boost, which comes from tax and interest. When it is returned to the employee, they have accumulated interest, typically at a competitive market rate. With inflation up to 8.8% from 4.7% in 2021, these programs are even more critical to offer to your employees.
Enrollment in these programs typically beings in February or March, and the payments get redistributed around November. This type of benefit does not require consistent work on behalf of the employee but is instead a way to passively set aside income and then get a little treat at the end of the year, get a little treat!
These programs are great for employers. You are helping your employees throughout the year, but by creating these programs, you are showing prospective employees that company benefits are essential to you. Showing employees that you care about them outside of work is increasingly important. Providing additional support options during a stressful time of year will help attract employees and retain them.
To learn more about the importance of benefits to retain good employees, read our whitepaper on the topic.
Benefits of a Christmas Savings Program
In addition to the benefits listed above, the Christmas savings program offers a lot. Keep reading to learn more.
The average American spends around $1,000 on Christmas alone. A Christmas savings program can help your employees circumvent credit card debt and start the new year without fear of interest on their holiday spending. Stressed about finances, they won’t be focused and productive during work. Providing your team with the option to enroll in a Christmas sayings program can give them peace of mind and provide them time to focus on their work.
Promote Financial Literacy
Offering your employees the chance to sign up for a Christmas savings program also increases the transparency in the workplace of discussing finances. These programs help eliminate the stigma about money and can become a great learning tool for younger or less financially literate people to expand their knowledge. Not only will you allow them to save additional money, but you’ll also promote a culture of self-education.
Another great aspect of the Christmas savings program is the rollover. If you don’t spend some or all of your savings that you have amassed, you can leave it in the account and grow your income with high-interest rates, tax benefits, and opt-out convenience. While geared toward allowing people to have more flexibility during the holidays, these programs can provide more long-term flexibility.
Start a Christmas Savings Program with Canal HR Today
Whether your goals are to help your employees save some money, eliminate a dependency on retirement funds, or want to create a more robust company culture, a Christmas savings program is a great way to start. However, it can be tedious to set up, from figuring out how to arrange the program to the day-to-day management, so contact Canal HR and let us handle the program so you can use more time running your business.
Canal HR is a professional employer based in Metairie, Louisiana, with decades of experience in HR, taxes, compliance, and interest rates. Contact us today to learn more about how to set up a Christmas Savings program.