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Think before you tap: How to control your finances during the festive season

With just six weeks before Christmas, the festive season is fast approaching. It’s a period of celebration, parties and spending quality time with family and friends. Perhaps this year, it’s your turn to host the annual Christmas lunch or maybe you’re taking that hard-earned summer holiday. Whilst the festive season can be a joyous occasion, full of gift giving and receiving and opulent meals, we all know very well that Christmas spending can easily get out of control.

To put it into perspective, the Reserve Bank of Australia revealed that in December of last year, Australians racked up an extra whopping $29 million dollars on their credit cards, which equates to just over $1,700 per person to pay off post-holiday season (What a way to start the year!). This Christmas, it’s predicted that as a nation we’re going to spend $25 billion dollars collectively, with $1 billion purely on decorations alone. Ouch. Now, there’s nothing wrong with spending during the silly season, as long as it’s not going to put you out of pocket. To avoid that nasty debt hangover, we’ve come up with four strategies that will ease the spending, keep you in control of your money, whilst keeping your finances on track.

Follow a strict Christmas budget

I know this seems obvious, but setting a budget specifically for the Christmas period can keep you on the straight-and-narrow when it comes to whipping out the credit card. Firstly, it’s important to be thinking about what you’re going to spending your money on. If it’s your turn to host the annual get-together this year, does that mean your grocery shopping budget increases? If you’re heading out to regional New South Wales for an extended family reunion, just how many family members require presents? Or, if you’re heading overseas, are you going to need some cash set aside for your holiday spends? Once your budget is decided, commit and stick to it to avoid unnecessary spending. When it comes to putting your budget together, it’s important to list who you need to purchase gifts for and allocate a budget to each of them. It’s also worth listing your food and grocery expenses too. Finally, consider those other Christmas based expenses, like gift wrapping, decorations and postage.

If you’re ready to start your holiday budget, download our complimentary template.

When it comes to gift giving, stick with experiences over material items

The latest tech-based gadgets, kitchen appliances, and flashy toys can certainly be expensive — especially when you have a larger family to give presents to. To avoid a budget blowout consider the alternative option of gifting experiences, rather than material gifts. For example, if you need to buy for a couple, a dinner voucher works as a great gift for two. If you need to buy for a family, consider a family pass to an amusement park. Whilst this technique may not drastically reduce your spending, it’ll certainly cut your gift list significantly.

Plus, not only is your bank account going to be happier, but you and your family are too apparently. Research completed by San Francisco State University actually found that people who spend their money on memorable experiences rather than material items were happier and felt the money was better spent. In fact, experiences might be a great way to bring distant family members together and avoid those Christmas squabbles too. As Fast Company put it, “even if someone wasn’t with you when you had a particular experience, you’re much more likely to bond over both having hiked the Appalachian Trail over both owning Fitbits.”

Consider the ‘Secret Santa’ approach

If you’ve got a large extended family, another alternative is to take the Secret Santa approach. Rather than spending $50 on everyone individually, the family can set a gift budget. Each family member is then assigned another one. This is a win-win situation — Not only do you know exactly where you stand budget-wise, you only have to purchase one gift, freeing up your time. This sort of approach, dependant on how large your family is, has the potential to save you hundreds, or even thousands of dollars.

Get in early and take advantage of the sales

There’s nothing worse than scrambling around a shopping centre on Christmas Eve in a mad panic, trying to find your Great Uncle Barry a novelty tie. So you know what does sound better? Having your Christmas shopping done well before the 25th of December and sitting at home with a well-deserved glass of wine in your hand. We suggest spreading all of that Christmas shopping across a few months. Not only will you feel relaxed, but by planning your Christmas shopping over the course of the year, you can comfortably budget and not feel that you have to whack every purchase you make in December on the credit card.

We think it’s perfectly fine to be frugal, so take advantage of any sales or discounts, both instore and online. Across the year there’s a range of sales — end of financial year, mid-season and of course Boxing Day. And, as a bonus, if you start your shopping early, you could find yourself with more cash by the time Christmas comes around (Now, we know that we’re in November, but this piece of advice could certainly be of benefit to you in 2019).

This silly season, don’t be silly with your money

As we mentioned before, we’re not expecting you to turn into Ebenezer Scrooge when it comes to your Christmas spending. It’s all about being prepared, considering every purchase and being mindful of how much you’re spending. At Talem Wealth, we don’t encourage our clients to make big, dramatic changes to the way they live their lives. It’s all about empowering them and encouraging good everyday financial habits — This also applies to the festive season. If you’re wanting to refresh your spending habits, explore ways in which you can better yourself financially or simply discuss a festive season budget you’ve got in place, then speak with us today.

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