Money makes the world go round. However, managing it isn’t as easy as folding clothes…
Are you starting to panic now that Christmas is here? Wish that you had been more organised instead of checking delivery cut-off dates on online shopping websites or being stuck in traffic at the shopping centre’s car park?
As a nation, we are expected to spend $25 billion over the silly season with $8.8 billion on presents alone. 1 & 2 Research by Money Smart found that 40 per cent of the total Christmas spend in 2017 was on credit cards. 3
The danger with being unprepared for Christmas is that is can put you in danger of impulse buying gifts and spending beyond your means, leaving you to clean up the damage you did to your credit cards when January arrives.
This blog is your checklist for a more organised Christmas 2019, so hopefully this time next year you can sit back with your feet up – not panic buying for your family or accumulating debt on your credit cards:
Make a list and a budget
The golden-rule for all organised people is to make a list. Channel your inner-Santa: keep a spreadsheet of all the people you intend to buy for next Christmas and allocate a budget to each person. As you make purchases for each person, update your spreadsheet to keep track of your spending. Most importantly, be strict with yourself, sticking to your list and budget.
Start saving early
Open a savings account in January and contribute a small but regular amount to it every payday. Australians on average spend $1,325 at Christmas; therefore putting aside $30 per week will add up to over $1,500 in a year’s time – meaning you should have adequate festive funds if you are the typical Aussie.
By comparison, making the minimum repayments on a $1,500 low rate credit card will result in you repaying $2,562 – a difference of over $1,000. 4
During the year, get online and follow the stores you are likely to purchase gifts from. This includes social media (e.g. Instagram and Facebook) as well as signing up to their membership programs. Doing this can allow you to take advantage of special member’s only deals and flash sales that you may not otherwise know about. Capitalising on this even if only for a couple of family members could contribute towards a thriftier budget.
Cash in your points
Accrue points using loyalty programs throughout the year and cash them in at Christmas time. Several people I know accrue loyalty points from their grocery shopping during the year then use these points to purchase Christmas essentials such as wrapping paper, gift tags and even the ham once December arrives. They believe it has made a real difference to their Christmas spending since they began practicing this.
This is great if you have children. A lot of the larger department stores hold big toy sales mid-year. Take advantage of the discounts by using lay-by and paying them off over time. The added bonus is that as the stores hold your purchase until the lay-by is paid off, you have less chance of the kids finding out where you hide the presents!
As early as October, start purchasing non-perishable items for the holiday season. If you plan on hosting your own party or just bringing a plate to someone else’s gathering as a guest, creating your own stockpile over time can reduce the larger outlays you may expect at the grocery store in December and also enable you to purchase items as they come on sale.
Spend within your means
Christmas is a time to have fun and enjoy time with your friends and family, it’s not a competition to see who can spend the most money. Those that matter the most to you will always appreciate the thoughtfulness of your gift– not it’s price tag.
2 & 3: https://www.finder.com.au/christmas-spending-statistics-2018
4: Calculation based on a balance of $1,500 on a CommBank Low Rate MasterCard with a purchase rate of 13.24% p.a. https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/credit-card-calculator
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