Christmas is a joyous time to spend with family and friends. But come February, June and December next year, make sure you are not still paying for all those joyous moments.

Rather than pay some 14 to 18 per cent interest on credit card bills raised during moments of gift-buying madness, globs of gluttony and oceans of refreshments, take up an action plan.

This year write down all amounts spent on Christmas cheer – presents, food, drinks and every other cost associated with yuletide spending.

Add up the total cost (let’s assume $2000), multiply that figure by an extra 10 per cent to cover for increased spendings next Christmas (up to $2200), divide that new total by 22 and place this amount ($100 a fortnight) into an account which you will not access until Christmas next year.

If you start this in late January and run for 22 fortnights, you will have put away $2200 by the beginning of December and be ready for a debt-free festive season.

Another issue to consider is where to place the $100 a fortnight.

Should it go into your normal savings account, a term deposit, a managed fund, under your pillow?

All are options worthy of consideration and most are likely to be discarded.

Avoid growth-style investments given the very short time frame involved (shares and property generally need at least three to five years plus).

Maximum income earned on cash-style investments could be as high as 5 per cent.

If $2000 is invested for 12 months, this equates to $100, then tax will eat up to 48.5 per cent of that amount.

As you are starting from zero and will add only a relatively small amount each fortnight, term deposits will not work.

Likewise, Cash Management Trust and Cash Management Accounts need a $5000-plus starting point for them to work at a reasonable rate (although if you have this amount available, adding in the fortnightly contributions and then clearing the Christmas costs once a year could prove to be a viable option).

Probably a separate savings account or monthly savings program is most likely the easiest concept to use.

Interest will be woeful (0.5 to 1 per cent), however you are not really going for lots of income – you want to make sure that the next Christmas binge does not cost you lots of interest payable.

The sole reason for this plan is to keep yourself out of debt and really enjoy future festive seasons without the worry of repaying high interest rates on your credit card.

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