With only a few weeks until Santa arrives the real cost of the holiday season is about to kick in. The family budget is always under most pressure this time of year and the spending choices you make will decide your financial destiny throughout the year ahead.
Unfortunately, once Santa has been and gone, many of us will be left having to pay down the credit card debt we have racked up over Christmas. How much we spend can see debt hanging over our heads for many months into the new year.
With Australian’s expected to spend over $8.9 billion on gifts this Festive Season you are sure to find these budgeting tips and ideas handy for managing your finances and keeping your spending on track.
By just using one or two of the Festive Season Budgeting Tips below you could save hundreds of dollars in unnecessary credit card debt and eliminate the stress of working out how you’re going to pay it off.
Have a clean out
There’s still time to bag some extra cash to boost your festive finances. Spend a few hours clearing out anything you no longer need around the house, like clothes, books, jewellery, furniture, music, or sporting equipment. You could sell these items online, hold a garage sale, or find a local buy-swap-sell. They say that one person’s trash is another’s treasure so, as well as pocketing a few extra dollars, you might just end up making someone else’s holiday season extra special.
Make a list and check it twice
Make lists of the things you need to buy and the food you need to prepare for the festive season. Having lists will help you plan your spending and keep you on track.
Personalise your cards and wrapping
Most people throw away their cards once the festivities are over, which is just like throwing money in the bin. This year, instead of spending your hard-earned cash on shop-bought cards that will only end up in the recycling bin, why not create them yourself and send your family and friends greetings they will want to keep?
Be a scrooge online
If you’re shopping online, look for ways to save every cent you can. Before you start, do a web search for discount or coupon codes that you can use at the checkout. Look in the sales sections of retailers’ websites to see what’s on offer. If you know what items you are looking for, search for them online instead of just going to one retailer’s website. You might find it much cheaper somewhere else.
Get social with shopping
If you follow your favourite brands and retailers on social media, you may be able to get exclusive discounts through these social channels. Their newsletters may also alert you to sales and deals. There are also discount or deal apps that you can use to find bargains that you can use as gifts.
Master the art of gift hacking
There’s a lot of pressure to spend up big on gifts at this time of year, but pricey presents aren’t necessarily the way to go.
Here are some ways you can show you care, while keeping a lid on your spending:
• Agree on a spending limit – Suggest to your loved ones that you set a limit on how much you will spend on gifts for each other to keep your budgets under control.
• Kids only – Talk to the other adults in your extended family about only buying presents for the kids this year, rather than for the adults.
• DIY vouchers – We often remember the things people do for us rather than the presents they give us. Consider giving redeemable vouchers for tasks like babysitting, massages, picnics, homemade dinners or even housework.
• Savvy sales – Take advantage of sales throughout the year to nab some bargains and store them away for gifts. But, even in December there are bargains to be had. You can also check out any clearance outlets near you, or sign up to their newsletters so that you’ll be in the know when they have a sale.
• Compare offers – Some stores match or beat competitors’ deals, so compare their offers and take all the details with you when you go into the store. Don’t be afraid to ask for a discount – you might just get a miracle!
• Second-hand bargains – Op shops, antique stores and second-hand bookshops can be a treasure trove for the thrifty shopper. If you’re prepared to spend the time looking through their stock, you can often find good quality items at a fraction of the price you’d pay at big name stores.
Track your spending
Keeping track of your festive spending is the best way to avoid going over your budget this season. Use our TrackMySPEND app to nominate a spending limit for different types of Christmas expenses and track your progress while you shop.
Give to those less fortunate
Spread the cheer by giving to those who are doing it tough. Consider donating to a charity on someone else’s behalf and give this to them as a gift. As well as money, many charities also accept household items, clothes and groceries, or you could volunteer your time to help them out.
Lighten your load on the day
The costs of entertaining can skyrocket at this time of year. But, with some simple planning, both you and your wallet can enjoy the fruits of your labour.
Here are some ways to lighten the load:
• Share the catering – Even if you’re hosting lunch or dinner, there’s no need to shoulder all the work yourself. Ask others to bring nibbles, drinks, salads or desserts.
• Buy only what you need – It can be easy to overestimate how much food you’ll need, only to end up throwing some away or eating leftovers for days.
• Switch supermarkets – Make a list of the groceries you need, then take advantage of the competition between supermarkets by checking out the advertised specials and stocking up. Don’t buy everything at the same shop if you can get it cheaper elsewhere. You might even get better deals at your local butcher or fruit shop.
• Use loyalty credits – If you belong to a supermarket loyalty scheme that builds up credit after you’ve spent a certain amount, check if you can use the credit to get a discount on your grocery shop.
Plan for next year
Once this holiday season is done and dusted, you should start planning for next year.
Here are some ideas to make sure you are set up:
• Start saving now – Open a high interest savings account in January and contribute a small amount to it every payday. Saving $20 per week will add up to over $1,000 in a year’s time. Using our Savings Calculator you can work out how much you’ll need to save each pay to reach your savings goal.
• Shop the sales – Shop for presents throughout the year, especially during sales. This will spread your costs and make them more manageable.
• Layby – pre-plan larger gifts and layby them a few months ahead so you can pay them off over time.
Hopefully these budgeting tips will help to keep your spending on track so you don’t start the New Year feeling stressed by unwanted debt. And remember the Festive season is about sharing time, laughter and joy with your family and friends – not the size or price of the gifts you give.
Source: ASIC – Money Smart