• Mattress or buried coffee can - Don’t trust anyone? Worried that the banking system is going to collapse? Keep your cash at home and close to you. Easiest access along with the biggest risk. Can you imagine coming home and finding out someone has robbed your house? This is an option, but I highly discourage keeping all of your cash at home. I would recommend keeping at least $200 around in case of an emergency.
• Checking Account – You probably spend most of your money from here anyway, so why not keep it here? For starters, you most likely aren’t getting any interest on your account. Additionally, you may end up spending some of your reserves accidentally or somebody else might with a stolen check. If you have a high interest checking account then this is a reasonable solution.
• Savings Account – You most likely will find a similiar situation with your savings account as you did with checking. Very low interest rates and possible fees. However, online savings accounts tend to have higher rates with no fees, making them a better option. I’m sure you have all heard of ING Direct and similiar banks. The rates aren’t as high as they used to be, but they are the best available. Leave a comment if you’d like an ING referral for $25.
• Money Markets – Money market accounts are savings accounts on steroids. Of course, the current economic conditions these steriods are watered down. Most money market accounts offer slightly higher rates than traditional savings. The knock on these is that they usually have mininum balances in order to get the higher rates. This is a good place to park your 3-6 month emergency fund cash.
• Certificate of Deposits (CD) – Putting your cash in a CD is a good solution for savings that aren’t needed to be accessed any time soon. CDs require a minimum time period of investment, usually 6-12 months to get decent interest rates. You can cash in the CD early, however you will lose a portion of your interest in fees. CDs are for medium to long term cash savings. There is also a technique called CD laddering that will help maximize your cash liquidity and interest earning.

These are the safest places to park your increased cash savings. Whenever we get out of this financial funk, the interest rate on these vehicles will raise. Any other place I’m forgetting to mention?

• Hidden treasure: Set up an online savings account and have some money deposited directly from your paycheck. Make sure you direct deposit that way you won’t forget or be tempted to spend the money elsewhere. It’s a lot easier to squirrel away $50 a month than come up with $600 in January. Looking for great rates? Check out an updated compilation of the best online savings account rates from Five Cent Nickel. I use INGDirect, who don’t have the highest rate, they have a great site, super customer service, and overall setup is a breeze.
• Jingle Jangle: If you are a cash based person, consider putting your change in a jar. Sure, this is really old school, but it does work. The change can build up over the year. You can even go to places like Coinstar and get no fee gift cards from them for various retailers like Amazon, AMC theatres, iTunes, and Starbucks. Boost your savings by putting in your dollar bills when you break a twenty or other denomination.
• Open the window: There is no rule that states you have to buy your holiday gifts starting the day after Thanksgiving. If you bargain shop and find a great gift for someone at a discount, pick it up and put it in the closet. Just make sure you put a sticky note on it as a reminder of who it is for. Buying gifts the last few weeks after christmas can save money too. I picked up some great christmas themed gifts in early January for 75% off.
• Tit for tat: Of course you can always sell things you already have. Craigslist is a very effective and cheap way to pawn off your unwanted junk to others. Take that money and put it in your christmas jar. We all have something to get rid of, might as well get some money for it. Don’t have anything? You can pick up many items cheap at garage sales and sell them again. You can also look on the free listings of craigslist. Most people don’t want to hassle with selling. Take advantage.
• Work more: If you are already have credit card debt and aren’t bringing in more money then you spend, you should already be doing this. Picking up a part time job can bring in enough money to pay for those holiday expenses. You can find part time jobs on the weekend that can help foot the Santa Claus bill. Tutoring, tour guide, instructor, and the always classic waiting tables. With tax season picking up, many of these companies will be hiring for seasonal help.

Five great ways to make sure that your Christmas 2009 is a success. Any stories to share on how you pay for the holidays?