When December swings around, it’s easy to get caught up in the Christmas spirit, but there’s a fine line between feeling festive and feeling like you’ve just broken the bank.
Each year, people all over Australia head into the holiday seasons with mixed feelings of excitement and total and utter fear that they’ll come out the other side with debilitating debt that they’ll be paying off until Easter.
Fortunately, it doesn’t have to be that way.
Here are six tips to help you avoid breaking the bank this holiday season.
Write a list (check it twice)
One of the best things you can do for your bank balance this festive season is to make a list of all the people you need to buy for this Christmas and then nominate a spending amount for each person.
This’ll not only give you an indication of how much you should be budgeting for, but it’ll also stop you overspending when it comes time to hitting the shops.
Agree on spending limits
A common mistake folks make at Christmas is spending a lot more than they need to. One way you can avoid this costly blunder is by deciding on spending limits amongst friends and family.
This’ll not only help you avoid a big credit card bill in January, but it’ll also help you avoid awkward exchanges where one person has clearly spent significantly more than the other…
Allocate costs to each event
Volunteering to host Christmas lunch is a slippery slope to heading into the new year with nothing more than a couple of pretty pennies to rub together.
One way to avoid this is by putting together a budget before each function so you can figure how much the event will cost, how much you can afford and what you can do to bridge the discrepancy. This can include making your lunch more pot luck style, where everyone brings a dish, saving you buckets.
Start setting cash aside now
This is one of the biggest favours you can do for your wallet. Start putting some money aside now. This might mean opening another savings account (be careful of hidden bank fees), and funnelling a small percentage of your paycheck into it every time payday comes around.
Got a few spare hours in the work week? Consider a bit of freelancing on the side! Just make sure you check with your current employer first.
Don’t fall victim to sales
You’re at your weakest during sales time. You’ve just spent months forking out cash for other people and now you’re dying to spend money on yourself.
Most deals are too good to be true. Make sure you’re still comparison shopping when you’re considering large purchases. Don’t get caught up in the infectious spirit of a Myer Boxing Day sale, because the reality is that you had to spend money to save it, and that new iPhone X might come back to bite you later if that money wasn’t in your budget.
Know when to stop
You’ve written your lists, and you’ve probably checked it six or seven times by now, so you know what you have to buy and you know that it fits in your budget.
Once you’ve finished this list – stop.
By now you will have spent big dollars on presents, food, alcohol, travel and more, so give your bank accounts a break. This is the best way you can avoid starting the new year with some new debt.
It’s all too easy to get swept up in the holiday spending cycle. There are marketing campaigns literally waiting for you at every shopfront, landing page, social media site and magazine all over the country. But keep this six tips in mind over the coming festive season and your pockets will be feeling a lot heavier.
Not sure how much to spend and save? Our free personalised financial health check will give you a guide on how to structure your finances.
Also published on Medium.