Don’t dig yourself a Christmas debt
I read recently that the average gift spend at Christmas time is over $500. Then I researched the food bill per person (and let’s be honest, the host get stuck with the lion’s share of costs) and it’s $122 for food and $131 for drinks. But for many of us, we spend a whole lot more and to be fair, it’s easy to get carried away buying gifts. So here are some quick financial survival tips.
- Bulging budget.
Write down all of your expenses for December. Home loan repayments, rent, insurances, living expenses, and add on the amount you intend to spend on gifts and broader Christmas-related activities. It’s important to know the numbers up front, so life’s necessities don’t get skipped and cause problems later down the track.
- Gift getters.
Write down all of the people you intend to buy a gift for in priority order, say partner, parents, children, maybe some friends and work colleagues. We’re going to weight their gift budgets accordingly.
- Present preparation.
Against the name of each recipient, write the gift you’d ideally like to get them. Do not go shopping for inspiration! This is where budgets get replaced with impulse. Is there a concert, event, dinner you’d like to take them to? Something you can buy now for next year? Is there a deal online?
- Evaluate extravagances.
If you’re from a family of big spenders, you have to put a ceiling on it. You might be surprised how many family members agree with you when you float the idea with one or two members of the family unit that this year the maximum price spend is say $50 or $150. Great giving can happen within a financial blueprint.
- Leverage lists.
Once you have a limit per gift, a list of recipients, and an ideal present for each, then and only then may you shop. The list will give you direction, parameters and a sense of accomplishment amongst the chaos of Christmas shopping.
- Count cash.
When you go shopping, leave all the cards at home and take the exact cash amount you allocated for the present purchases. This tip is a game changer.
- Fractionalise food.
If you’re hosting, write the entire menu today! The whole thing. Food, booze, ingredients, appetisers, dessert. Then start carving up affordable items for others to bring. Delegate. Get your aunt to handle the cheese platter. Get grandpa to be in charge of the sherry. Outsource the appetisers to young adults. And tell them now, so they have time to prepare!
- Finish by the fifteenth.
Do all of this by 15 Dec 2019. Have all your presents purchased and wrapped, have the whole menu documented and allocated, and spend the lead up to the big day feeling smug and accomplished. You will have beaten the horrendous rush of last-minute shopping, poor present choice, and ballooned costs under pressure. If you’re like many and have family abroad, finishing your purchases by then gives you ample time to post.
- Frequent flyer.
Christmas is a great time to use points rather than cash. You might get away with buying gifts without spending a cent!
The holiday season is a time for family not financial pressure. It’s about fun not funds: carving out time to put the people in our lives first. Budgeting allows us to keep the true spirit of the season at the centre of the festivities.
After Christmas, and over the New Year, you may find yourself thinking about your big plans for 2020. I’m available in January to start working on your financial goals for the year ahead.
Let’s make next year your best year yet. Book in early for a January catch up.
Plus, don’t miss you chance to win a $500 Flight Centre voucher, by simply telling us about your experience using a mortgage broker. Take the 5 minute survey here to enter. Entries close December 13, 2019. Good luck!