We are on the home stretch to Christmas: a time for family gatherings, over-indulgence and hefty holiday-related expenses. Expenses can spiral out of control at this time of year as we buy gifts, host parties and go on holidays. With a little bit of planning and some creative thinking, however, you can rein in your expenses and minimise the impact on your wallet.
Make a plan
Draw up a spending plan and identify what you can afford to spend on different areas such as present buying, food shopping and entertainment. Impulse buying is a common Christmas phenomenon – having a budget can help you stick to what you can afford.
Doing your shopping early can help you avoid getting swept up in the euphoria of last-minute shopping and the trap of buying expensive gifts due to lack of time. If you start now you can also take advantage of retail sales and save money.
Be creative with gifts
Christmas is a time for giving, but you don’t have to restrict yourself to shop-bought gifts. Instead, consider making gifts, at least for extended family members, and make your own Christmas-themed biscuits, jams or preserves to give to friends and family. Greg Pride, financial adviser with Centric Wealth, suggests giving away non-monetary ‘vouchers’, such as washing the recipient’s car, cooking them a meal or doing their laundry and ironing for a week. He says: “Ask yourself, ‘do I need to spend money on presents to relay the spirit of Christmas?’”
Paying by cash instead of relying on credit cards eliminates interest charges on credit card purchases and keeps the lid on mounting debt. It will also help you control how much you spend and minimise impulse buying.
Remove the temptation to spend
Consider locking up some of your money in a term deposit for 30 days or more. “A lot of people will spend exactly what’s available to them so lock up some money in a term deposit is great as it removes the temptation to spend it,” says Pride. Shop around for a high interest rate and you’ll also make money in the process.
Say no to pricey activities
Pre-Christmas lunch with friends at the latest ‘hot’ restaurant or a dinner cruise? Before you know it, the financial cost of catching up with friends and family can result in a major bill. Instead, turn down offers for activities that will require you to spend a lot of money and suggest cheaper alternatives, such as picnics, lunch at home where everyone contributes a dish, or choosing BYO restaurants to rein in the bill.