Many people feel overwhelmed after the holidays. They bought a bunch of gifts for family and friends and without the cash to pay for these gifts they used thier credit cards. Same can be said for some people with vacations or big house bills and car repairs. Without preparing for these expenses many people have to resort to the use of thier credit card and thus are paying for these unforseen or possibly forseen expenses months after they've been incurred. My wife and I decided to do things different. We intend to be prepared for these unforseen or forseen expenses when they incur and be able to pay for them in cash.
My wife and I have set up a system using ING online bank to prepare for our future expenses that we know about. We have done this by opening up different online money market accounts through ING for each of our known future expenses categories. The categories we currently save for are vacation, gifts, house, yard, car expenses and car insurance. We have a different account set up for each.
We set aside a set amount each month in each of these accounts to help us pay for future expenses. We may not yet even know what this money will be spent on. For example we set aside a certain amount each month for vacations while we currently don't have a vacation planned. But when the time comes that we do want to plan a vacation we will have the money. Same can be said for gifts. We don't know what we will be buying for gifts but we do know next christmas we will be buying gifts for family. Thus we estimate the amount of money we will be spending in the future for each of these categories and when we will be spending this money and set aside some money each month to be able to pay for these things in the future.
This is an easy planning technique that anyone can set up. I think it is always better to be prepared for the unknown then to let the unknown come by one day and knock you flat on your behind. Get prepared!