It doesn’t seem like too long ago that we were all enjoying turkey and ham, hosting summer barbecues and enjoying all that the Australian summer had to offer. Suddenly, we’re a month shy of wrapping up 2014’s third quarter, with Christmas just 16 Fridays away.
Last Christmas Australians were tipped to spend over $18.4 billion over the festive period, according to the Commonwealth Bank. $2.2 billion of that was estimated for entertaining relatives and friends at home — a figure that could increase during the 2014 season.
With these figures in mind, now’s a great time to start planning for the upcoming expenses the silly season brings, by starting a Christmas savings plan. That way you can enjoy the upcoming festivities — without the money stress!
Start a festive savings account
For everyday consumers, the temptation to rely on credit cards to make ends meet in December can be all too tempting.
However, opening a dedicated high-interest savings account now could be a smarter solution. For instance, putting aside $40 per week over the next 16 weeks will amount to $640 in the week before Christmas — a figure that will easily pay for food and drink costs on December 25.
Increase this figure to $70 per week, and you’ll have a fund of $1,120 to dip into. Of course, these amounts don’t account for interest, which will accumulate on top of the principal! Be sure to calculate what kind of interest you’ll earn using RateCity’s savings calculators.
Clear your debt
Saving money in a high-interest savings account is the first step to hosting a stress-free Christmas.
However, it’s probably time to reconsider debt as well. If you’re only making minimum credit card repayments, consider refinancing to a card with an introductory no-interest period. During these months, pay off as much as you can.
There’s no point building up your savings if you’re paying excessive interest on your existing debt. If going beyond the minimum payments seems challenging, gradually increase your repayment amount. By taking an incremental approach, lowering your non-essential spending will be a bit easier.
Set a savings goal
It’s a lot easier to save if you’ve got a goal in sight and the good news is, saving is a trend that’s catching on.
“Against the backdrop of the global financial crisis, uncertainties such as job security and interest rates have caused concern within the Australian economy. With this in mind, consumers are focusing more on savings than on spending,” said Norman Morris, Roy Morgan Research Industry Communicators Director.
So whether it’s Christmas lunch, a festive holiday or presents for the kids, set goals to work towards. Make sure you attach a financial figure to your holiday ambitions, too.
A visual reminder can help you in your savings goals, too. Print off photos of your holiday destination or sumptuous Christmas recipes and stick them on the fridge. You’ll be reminded of what you’re saving up for on a regular basis, which may curb the temptation to overspend.
Leaving your credit cards at home, instead of in your wallet, may also help you save.