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How to have a very merry – and affordable – Christmas

How to have a very merry – and affordable – Christmas
Christmas should be full of laughter and good cheer, and if you plan wisely, you can also avoid a spartan New Year spent paying off your yuletide spending. With a survey finding that Australian shoppers spend about $10 billion on gifts alone, or $700 per person, by the time you also add in the costs of decorating, catering and Christmas travel, Christmas can become very expensive, very fast1. But it doesn’t have to be a strain on your hip pocket. Here’s five tips to help you keep your Christmas spending under control.

1. Set a budget

Firstly, you need to understand how much you can afford to spend. Once you understand your financial position, you can estimate the total amount you can afford to – or want to – spend at Christmas. Next, create a Christmas budget based on spending categories such as gifts, entertainment, catering and travel, and allocate money to each one. Remember to allow for the season’s parties, events and social occasions, and the extra costs these can entail, such as taxis and incidental gifts.

2. Start planning early

When it comes to Christmas, the earlier you start saving – and planning – the better. Some people use the Boxing Day sales to stock up for the following Christmas. This may seem extreme, but the thinking behind it is great. Taking advantage of sales periods during the year and stockpiling gifts can help you make your money go further and spread the cost of Christmas throughout the year. It’s not too late to take advantage of this strategy for this Christmas, by stocking up during sales periods between now and December 25.

3. Organise your giving

Gift-giving can be expensive, especially if you have a large family in which everyone expects a present. Some strategies you could look to adopt to keep spending on gifts under control include agreeing a spending cap per person amongst your family members, or using a system where everyone buys for just one person, rather than the whole group, known as a kris kringle or secret santa. And remember that not all gifts need be expensive. Handmade items or vouchers for massages, home-cooked meals, gardening, or home repair work are both thoughtful and cost-effective.

4. Share the costs

Eating a special meal with friends and relatives is a Christmas ritual for many people, but it can be an expensive one. Some ways to make the Christmas meal more affordable include rotating the hosting duties (and the cost) between extended family members each year, buying items in bulk, asking each guest to bring a dish or drink, or getting your guests to chip in some money towards the cost of the meal. And don’t forget to use up any leftovers!

5. Use cash

Research has found a link between the way we pay for purchasers and how much we spend,  so to reduce the risk of blowing your budget, use cash. By withdrawing the amount you’ve got to spend at the start of your shopping trip you’ll be able to easily keep track of how much you’ve spent and know when your money’s run out. And to avoid the temptation of overspending or spending money you don’t have, leave the credit cards firmly in your wallet – or if necessary – at home.

And finally…

Above all, Christmas is about enjoying a break and celebrating with family, not about how much you spend. Remember the true spirit of Christmas, relax and enjoy!

ASCK Pty Ltd (ACN 105 450 566), trading as AMEGA Financial Solutions is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited Australian Financial Services Licensee and Australian Credit Licensee 232 706. General advice warning: This website contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.

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