As well as being a lot of fun, the holidays can also put a serious dent in our finances if we’re not careful. Last year, Australians spent an estimated $10.7 billion collectively on their festive shopping1.
Predictions for this year suggest that we’re reigning in our spending somewhat, in light of fears about the economy, but many will still be unable to resist the urge to splurge – possibly more than they can really afford. Those aged 35-44 are predicted to spend the most this year, at an average of $570 per person2.
Because it’s not much fun paying off a credit hangover for months to come, here are our top tips on how to save while still having a fantastic festive season.
Save first, spend second
I recently posted a video on LinkedIn about the lessons we can teach our children about money. One of the top lessons Dad instilled in us was to ‘save first, spend second’. This means that today I have a separate account that I put money into each week over the whole year for presents and holidays. Start your account today and set up an automatic deposit. You’ll barely notice the money going out but will feel so much more prepared when the holidays roll around or you need to purchase a major gift, say for a wedding or significant birthday.
Set your budget now
It’s easy to overspend when we’re not tracking what’s going out and haven’t calculated how much we can afford to outlay. Take some time now to sit down and work out your holiday budget, as well as ways to stick to it. This might be putting money in a dedicated account that you use for all holiday spending or sticking to cash-only shopping. Track your spending as you go to make sure you’re keeping to the budget. Identifying any areas of over-spend will help you prepare for next year too.
Shop online and search for sales
Around this time of year there are many discount codes, sales and offers that you can take advantage of, so always take a few minutes to search for coupons or other offers before you buy online. Following your favourite retailers on social media is another smart way to make sure you’re aware of any sales and deals. Just make sure that these don’t lure you to buy things that weren’t on your list!
Creative and thrifty gift giving
In our family, we don’t buy gifts for adults, we only buy for the children. Other ways that you can limit spending on gifts include Secret Santa or investing time in sourcing thoughtful gifts that don’t cost the earth. Consider giving vouchers for cleaning, meals or babysitting, as we all need more time more than we need more things!
Homemade and DIY
If you love baking, cooking, gardening or crafting, you can give something made with love for a fraction of the price that will likely be more meaningful to the recipient too for the time and care spent. Likewise, DIY projects as a family – such as making your own Christmas decorations instead of buying more plastic – can come with the bonus of fun, quality time.
Choose experiences over things
In these days of waste, we really need to limit disposable toys and excess where we can. Make a pact with your loved ones that instead of exchanging gifts of ‘stuff’ you likely don’t need, you’ll put the money toward sharing an experience instead – perhaps a nice meal or theatre tickets.
Remember, the most important gift of the season is enjoying quality time with friends and loved ones, so put that on the top of your list.
Happy holidays everyone!
If you need help with your budget or financial goals, please call us anytime on (02) 8268 2900 for an obligation-free talk.
1Source: 2018 Commonwealth Bank Christmas Consumer Spending Study. Undertaken by ACA Research in November 2018. https://www.commbank.com.au/guidance/newsroom/christmas-consumer-budget-and-spending-2018-201812.html
2Source: Mozo.com: Hold your reindeers! 1 in 4 Aussies plan to pull the reins in on Christmas spending. Published online November 25, 2019 based on research by Mozo. https://mozo.com.au/credit-cards/articles/hold-your-reindeers-1-in-4-aussies-plan-to-pull-the-reins-in-on-christmas-spending