Budgeting on a fulfilling festive season

Written on the 4 December 2018 by Arrow

We're at that time of the year again: the shopping centres are packed, you're signing dozens of greeting cards, and your little ones have just handed you a 'wish list' longer than they are tall. At the back of your mind, you might even be hoping for a treat or two for yourself.

It's easy to get caught up in the consumer frenzy at this time of year. The media encourages us to equate spending with generosity, making buying a real emotional issue. From TV shows about the 'best Christmas ever' to department store ads encouraging us to give that special someone 'what they really deserve', there's no wonder Australians spend billions every year over the holiday season around $955 per person, according to ASIC's Moneysmart.i

If that sounds like a lot, our Christmas debt hangover is even bigger, with the average Australian credit card holder spending $3342 on plastic in December last year. Worryingly, many were unable to pay it back for months, often accruing interest.ii

If this sounds like you, perhaps it's time to put in place a plan for this festive season to make sure it's a time not only of merriment and joy for all the family, but also one that doesn't leave you too far in the red.

Have a great holiday season without overspending

• Write a budget for your gift-giving, and stick to it. A thoughtful, well-chosen gift that reflects your relationship with the recipient often means a lot more than something flashy.
• If you're hosting, plan the meal ahead of time to take advantage of savings and make sure you can get the ingredients you need without overspending. For example, you may need to order a ham or turkey up to a month in advance.
• Make your own decorations and crackers: this can be a fun activity to do with kids, or even by yourself.
• Speaking of DIY, Instagram and Pinterest have made homemade Christmas presents cool again. From personalised photo calendars to cookie mixes, there's an idea for every person on your list.
• If you're still tempted to spoil your kids, grandkids or partner, consider giving one small meaningful present up front, and saving the rest of the spending until sales time when you'll get better value for money.
• Reflect on last year's Christmas spending. Think about everything you bought, what was really 'worth it' after all, and what you could do without.
• Rather than getting everyone in the family a separate gift, consider doing a Kris Kringle of some sort to minimise everybody's spending. Otherwise you can also make a rule that you just do gifts for the kids.
• Australian households throw away nearly 10 billion in food waste every year and the festive season is a major culprit. Reduce your Christmas spending by planning a meal in line with how much people actually eat rather than leaving weeks of leftovers that never get eaten.
• Consider whether, if you were to put holiday expenses on your credit card, you can still pay the balance in full ASAP. To put this another way, think about your total spend divided by 52 weeks (or 12 months however you do your regular budget) does the amount look reasonable and affordable now?

However you manage your holiday budget, we hope you have a wonderful time with friends and family, and a well-deserved break. For more help with getting your spending and saving in order this festive season, make an appointment with us today.

i Asic's money smart, Australia's Christmas spending, 25 Oct 2018, available from https://www.moneysmart.gov.au/managing-your-money/budgeting/spending/australias-christmas-spending, accessed on 29 Oct 2018

ii Elsworth, Australians are being warned not too overspend their credit cards this Christmas, news.com.au, 19 Nov 2017, available from https://www.news.com.au/finance/australians-are-being-warned-not-too-overspend-on-their-credit-cards-this-christmas/news-story/2cf080bfd59c545f9b9e34770c564f95, accessed on 29 October 2018