Posted on 19/11/2019
How often have you promised yourself that this will be the year you stick to your Christmas budget, only to wake on Boxing Day with a severe case of festive debt regret.
It’s no secret that Australians spend big during the festive season, with research showing we spend a whopping $25 billion (about $1500 per person) on all the Christmas trimmings – everything from lavish lunches to presents. That’s a serious amount of jocks and socks!
It seems that even though we know Christmas is coming, and we start-out with the best intentions, we still fall into the trap of overspending.
The worst part is that festive debt is likely to last much longer than your leftover Christmas ham - well into the new year in most cases. Research shows it can take until Easter the following year to get on top of this debt, meaning it has the potential to derail any financial goals you have in place.
So how do you stay on track and avoid Christmas turning into a financial nightmare? The following guide will help you stick to your budget this festive season, and head into the new year feeling financially ready to reach your goals.
Set a budget, make a list…and check it twice
The best way to manage Christmas spending is to set a budget, and then track your expenses to stay within it.
Prepare your budget by making a list of who you’re buying for, and allocate how much you’re prepared to spend on each person. Also include on your list the food and drinks you’ll need to purchase over the festive season and any travel costs associated with your celebrations. It’s a good idea to build in a contingency amount for those last-minute, or overlooked, costs.
At this early stage, talk to your family about reducing Christmas spending. One way to do this is to reach agreement to only buy presents for children, as opposed to buying for adults as well. Another is to implement a Secret Santa style of giving.
Once you’ve documented all your expenses, you’re ready to hit the shops. But before you do, make a commitment to yourself to stay within the limits you’ve set on your Christmas list. This means controlling any urges to shout a round of drinks to all your workmates at your office Christmas party.
Track your spending
With so many things to organise (and buy) at Christmas time, it’s easy to lose track of your spending. Small purchases, like an extra Christmas decoration or last-minute present for your boss, can add up.
The best way to stay on budget is to carefully track your spending. You can do this the old fashioned way with a pen and paper, or a better way is to use any one of the many budgeting apps now available.
Write down or track every purchase you make, even the small ones, and check-in on how you’re travelling on a regular basis.
If you head straight to your local shops and buy the first gifts you see, chances are your budget won’t go very far. But with a bit of creativity and smart shopping, you’ll be amazed at how far your money can stretch.
Smart shopping starts before you even set foot outside the house. As a first step, do some online research for the items you’re searching for. Compare the costs at multiple retailers, and see if you can access any discounts for shopping online, making sure to factor in shipping costs. Also check-out the sales sections of retailers’ websites to see what’s on offer.
Investigate whether you can access any special deals through your financial providers. Statewide Super offers an exclusive rewards program which enables members to access a huge range of offers and discounts from more than 100 big name brands. It’s the perfect starting point for your Christmas shopping.
If you’re really prepared, take advantage of sales throughout the year to find some bargains and put them away for Christmas.
Eat, drink and be merry…with less
While gift-giving is the main culprit, reducing Christmas spending extends to the lunch table with Australians spending about $10 billion on food during the festive season. Of this, about 35 per cent is wasted and ends up in landfill. With some simple planning, you’ll enjoy a much fuller wallet and a lighter waist this Christmas.
Firstly, buy only what you need. It’s easy to overestimate the amount of food required for Christmas lunch. Open the discussion early with your family and friends about what each of you is bringing, and don’t go beyond this. Be realistic about how much food you actually need, to enjoy a satisfying meal.
Prepare now for next Christmas
While it’s much talked about but little practiced, one of the best ways to save money at Christmas is to start planning for the next one as soon as this year’s is done and dusted.
Getting set early enables you to start funneling money away in preparation, as well as shopping at sales throughout the year to pick-up bargains.