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I’m Gary LaPointe and I’m guest posting while Tiffanie and Dave are out of town.  You can visit my blog at GarySaid.com, where I talk about everything from books/movies/music reviews to my travels and occasional finance tips (most recently I’ve been talking about my migration to WordPress).

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What can I tell you about my budgeting in a few sentences or less? I hate debt (probably inspired by my mother who also hated it) so my only debt is my home.  I hate recurring costs (cell phone, cable, etc.) and I hate big bills so I try to save for them in a painless way which brings us to the topic for today.

The Christmas season is probably the biggest spending free-for-all for buying presents or just spending money, right? So it’s time to start thinking about those costs for December 2009, if you follow these steps you won’t have to think (or stress) about it come December. The simplest solution (besides not buying presents) is to set up a Christmas Account at your bank and make regular deposits into this account throughout the year.

What is a Christmas Account? It’s just an additional sub-account at your bank. My Credit Union calls them Holiday / Vacation Accounts and they are treated the same as a regular savings account (interest and everything). These accounts are not just for holidays and vacations as you’ll see below.

First figure out what you spend on the holiday season; add in presents, airplane tickets, even party expenses if you have a huge get together (if you spend a lot of money on New Year’s Eve, add that in too!). The holiday just ended so you should be able to get a good estimate of what you just spent (or what you’d like to have spent). Obviously everyone’s circumstances differ, but let’s just say it’s an even $800.

Now contact up your bank (try by phone first) and ask them what you need to do to set up a Christmas / Holiday / Vacation account. Set it up and ask them to automatically transfer a set amount from your regular account (wherever your paycheck goes). Hopefully you can schedule it on your paydays; there is a chance they can only do it once a month and you’ll have to figure out the best day for you. For the $800, if you get paid once a month make it $67 ($800/12), twice a month make it $33 ($800/24), if you get paid every two weeks make it $31 ($800/26) and if you get paid weekly make it $15 ($800/52). From this point on it’s auto-magic! For the rest of your life it’ll transfer this money into your sub-account and you’ll be ready come the holidays.

While you’re setting it up do two more things: See if they can give this account a name that will show up on your statements like “Christmas” so it’ll be easy to remember when you look at your account. Also, see if you can set this account up so if you ever overdraft another account it will take it from here before bouncing a check (I don’t want you mad at me for moving this money around and getting a fee!).

Pros: It’s painless to do. The money is there when the holidays come and it’s also there in case of some other emergency. Cons: None that I can see. Unless your bank has it in a lower interest earning account (but it’s still better than a shoebox under your bed).

These accounts are not just for holidays! Keep in mind you can set these accounts up for anything. I originally started doing this in college - my health insurance payments came three times a year (one big and two small payments) so I set this up and it made it much easier to make those bill payments when they came along. Since the money disappeared from my regular account the same day as I got paid, I didn’t get a chance to miss the money.

Currently, I have ten sub-accounts for items like Automobile Expenses (repairs, registration, etc.), Vacations (self explanatory), a New Car (I want a good down-payment ready when my 2000 Sebring dies) and Technology expenses (I like to buy gadgets and this limits me). You just need to figure out what the approximate expenses were for last year (or an average year) and divide out the amount based on the number of times you make “payments”. Don’t panic on the exact amount, you can always adjust it later.

I’ve helped friends set up accounts for Escrow (home property taxes) and when the bills come due (summer and winter) the money is already there; they transfer the money from the Escrow account to their checking before they write a check and it’s done. It makes it so painless for them, they don’t know why they ever stressed out about those payments previously.

Remember: this money isn’t gone, you can easily get to it if you have to. It’s just in the bank in an interest earning shoebox! Good luck, I hope this works well for you!

Let me know what your experience is when you set one of these accounts up or if you already do this please let us know how it works for you.