12 - December

Setting Your Christmas Budget: 8 Ways to Avoid Digging a Debt Hole this December

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Already the Christmas season is upon us, the time for gift giving and celebrating has arrived, and with it your mailbox will be crammed full of tempting gift treats and food catalogues as retailers look to ramp up their marketing.

Although this is a time of celebration, for many Christmas creates a lot of stress, most of it financial. Having young children can only add to it as it becomes difficult to say no to those you love the most. Add in some last-minute work deadlines and it’s easy to see why many find it their least favourite time of the year.
Many of these problems can be prevented however with some careful planning on what you spend leading up to Christmas. Here’s our suggested hints on how you can make this period of the year a much more relaxing event.

Set a budget. The biggest issue at this time of year is overspending, but you don’t know you’ve overspent if you don’t even know how much you want to spend in the first place. The starting point is a good budget. Here’s how to break it down into the four key categories

  • Pre-Christmas and New Year parties/eating out/drinking
  • Gifts
  • Christmas dinner
  • Holidays/transport

Once you’ve determined how much money you have to spend this December, allocate it across the four categories according to your priorities. If you’re not planning on heading away anywhere then your holiday budget can be zero leaving more for each of your others categories. Divide your money up based on how many people you have to buy for, how often you plan to go out and so on, and see if you have a reasonable amount available for each. Breaking it down like this can allow you to set a budget per person for gifts and an amount to take to each dinner or drinks.

Pay cash where possible. One of the best ways to not overspend is to take the money out of your account and not use a credit or debit card. Spending $50 on your sister? Leave your cards at home, take the cash to the store and you can only spend what you have in your pocket.

Eliminate some presents. One of the traditions of Christmas is to keep giving gifts to people you feel obligated to buy for. Guess what? They probably feel the same. Do you swap meaningless clutter with your neighbours, second cousin, or send a gift card to Aunty Joan who you haven’t seen in three years? Reach an agreement that you aren’t going to continue.

Ditch Christmas cards. If you’re still hanging on to this tradition, it’s time it went! With postage now more expensive it’s not worth the cost or hassle. Send an e-card instead.

Create a Christmas account. You may be a little late for this year, but once January rolls around discipline yourself to create an account and, based on the budget you set for this year, allocate some of each week’s pay to your account during the year. By the time Christmas arrives next year the money will be sitting ready for you.

Avoid impulse spending. Don’t buy anything the first time you see it. Marketing is full of “limited time offers”. Walk away and if you still want it the next day maybe, just maybe, it’s meant to be.

Pick up some post Xmas bargains. Along with establishing your Christmas account new year/January can be a great time to pick up some Christmas presents for next year at a heavy discount on pre-Christmas prices.

Mind the food budget. One of the biggest areas of overspending is food. Statistics on Christmas food consumption show nearly $1 billion in Christmas food is thrown away in Australia next year, that’s roughly $45 for every person in your household. A family of four represents nearly $200 of wasted food.

These 8 steps will help you negotiate the mine field of Christmas temptations in front of you and hopefully make this Christmas even more merry than usual. For more specific help don’t hesitate to contact us.

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