Pressure to provide the perfect Christmas tops the list of reasons people over-spend during the festive season, so we look at ways you can enjoy Christmas and have cash left over. And the Christmas spend per household is on the rise, averaging about $1,000-$1,500 for food and presents.
If you want to spend smart this Christmas and create memories instead of debt, follow these 4 tips to get the most out of the festivities and have cash left over.
1. Adopt new Christmas traditions
Consider starting some new traditions the whole family can join in and save along the way. Here’s a few ways you can do it:
- Have some fun with a Secret Santa or Kris-Kringle arrangement. Draw names out of a hat so everyone has to buy just one fixed-price gift. Just make sure you set the amount everyone needs to spend.
- Consider giving out smaller gifts on Christmas Day and make a pact with family to go shopping together for a larger present in the Boxing Day sales.
- Think of others less fortunate. Make a donation to charity in the name of a family member or friend and give them a card showing who or what their gift helped. Remember, the donation is tax-deductible.
- Arrange for everyone to ‘bring a plate’ for Christmas Day lunch so everyone pitches in and splits the cost and effort.
2. Set a budget
If you don’t want to compromise your Christmas spend, then set a budget to ensure costs don’t blow out. It’s as easy as making a list of who you will be buying for and allocate an amount per person. And, if you are hosting dinner, lock down the numbers to work out how much you need to spend on food and drink. Then consider the following and save:
- Shop at local farmer’s markets for fruit and vegetables.
- Buy in bulk. Get all the extended family on-board to buy pantry items for Christmas lunch in the lead up to Christmas so you don’t have to do it all at once.
- Super-cheap deals are available online and can halve the cost of buying items in the supermarket. Also look for discount codes to get even greater savings.
- Choose lay-by over credit cards. This way you won’t run up debt you can’t afford and you’ll have your presents paid off sooner than later.
3. Commit to a savings plan
Treat savings in the same way as you would a bill. Committing to a savings plan is more effective than running up debt that takes you the whole year to pay off.
- The earlier you start saving, the less you need to put aside. Even a small amount over a few months will make a huge difference. For example, putting aside $10 per week adds up to over $520 in one year, enough to cover Christmas lunch, or dinner.
- Put aside loose change throughout year. You’ll be surprised at how much you’ll have tucked away which can be put towards gifts, or a tax-deductible charity donation.
- Open a high interest savings account and contribute a small amount to it every pay. For example, saving $100 a month from the start of the year will allow you $1,200 to spend at Christmas — enough for all those Christmas gifts!
4. Future of Christmas savings
While all the family is enjoying the savings while spending time together, why not plan ahead for next Christmas to ensure the festive season is even better:
- Pool all savings and take advantage of compound interest. If every family member [averaging 5 adults] contributed just $10 a week into a high-interest account [4%] by the end of the year there’d be $2700 to put towards Christmas lunch, dinner and Secret Santa pressies.
- Reinvest any cash you receive at Christmas back into that high-savings account.
- Put aside lottery winnings, or any winnings into your high-savings Christmas account.
- Buy gift cards regularly and put them aside to use as presents or to buy presents, especially during Boxing Day and mid-year sales, or to purchase food prior to Christmas.
- Pre-plan larger gifts (especially for the kids) and lay-by three to six months in advance so you can pay them off before Christmas.
Christmas is just one day in a year, so there’s another 364 days to budget and spend smart. If your aim is to have all bills paid before Christmas so you don’t have any surprises in the New Year, Allied Investment Group advisers can help you set up a budget or savings plan so that Christmas is stress-free, fun and affordable year after year. Call 1300 886 149 to put your festive season plans in place.