“It’s beginning to look a lot like Christmas..” is playing in the background and the aircon is on high as we are writing this article. Christmas day is just around the corner and we are all starting to get on board the train of spending. Some of us find much joy in giving and will go above and beyond what is expected this year as a way of showing our love.
For others of us, we’ve seen last year’s presents end up in the back of the closet and so this year – 1 item in the form of a gift card is going to be enough. Whichever way you swing, our north Brisbane financial advisors are giving some tips for this month to minimise expenses during the silly season.
So, for those who have left their shopping to the last minute, here are some tips to avoid the crazy cycle and do well financially this Christmas:
- Make a budget – and stick to it!
Have you ever participated in a conversation along these lines?:
“So we will spend $ for each person on this side of the family.”,
“Okay. But what about my mum, she really has done so much for us this year, maybe we will do $$ for her?”
“Oh yes! That reminds me, my sister had to get some repairs done last month, so we might just add $$$ on for her too.”
“Well if we do that, we should probably match your brother’s gift so it doesn’t seem unfair.”
If you’re anything like me, you have probably had some version of this conversation. And although there are times that extravagant presents are called for, it is unlikely that it will be for each person on your gift list, exactly for Christmas day. As professional financial advisors, we must start with this tip.
Although this can seem like something you’ve heard over and over, this really is a golden nugget of wisdom. Make a budget and stick to it. If you prepare your mind with a budget ahead of your shopping, you’ll be less inclined to overspend “just to get that little bit extra”.
A budget is also needed for the month of December. Suddenly, every weekend is booked out, we are eating and drinking out more, and of course fuel is skyrocketing just when we plan to drive down to visit family. According to Finder, Australians are set to spend just under $24 billion this festive season (including gifts, drinks, travel etc). Take time to sit down and mark out what expenses are coming up for this month and see where you can cut back on other items.
You can also set limits for the number of meals you plan to eat out or wear something from earlier in the year rather than purchasing a new outfit. All these steps will help you to stick to a budget so that you do not overspend and get yourself in a pickle for the next month. Plan out which events you will attend, who you are buying gifts for (and how much), and what travel you want to do – you’ll thank yourself in January.
- A sale is only a sale if you have money for it.
We’ve all been there. We walk past a shop or receive an email from a retail store (which we never intended to visit), and we see the big red letters. SALE. Before we know it, we are pulling out our card to buy the ‘3 for 2’ items because “we can give these as stocking fillers!”. There are definitely some sales which can save you a lot of money and they are great to jump on. But our north Brisbane financial advisors want you to stop, think and ask yourself a question before you pull out that card. “Do I have money for this?”. Are there enough funds for this purchase? Were these items a part of your budget and did you intend to buy this gift for your family or is this just something you saw COULD be a nice present. There is a big difference between the two. Not only can this type of spending push you over your budget and cause future financial problems, but you might also be buying a present that will end up on the shelf as the intentional aspect gets lost in the ‘sale’.
Consider also whether you have done your research. It is quite often an item you’re looking to purchase is less expensive at another store. Type the item into Google or take a visit in store and compare prices to see where the cheapest one is sold before you fall for those big red letters. A handy tip to help you in this area is to have the right amount of allocated cash in an envelope, so that when you go buy a present you have for example $40 to spend and that’s it, which will prevent you from dipping into more when you see a sale.
So firstly, ask yourself if you have the money, reflect whether this was an intended gift and compare prices elsewhere. Once you’re confident it is a decent sale for a gift you planned which you have the money for, then you can go for gold. This tip from our north Brisbane financial planners can help you avoid the pull of those big red letters and maybe even help you save those extra few dollars.
- Plan for next year
Although we’re almost at Christmas now, it doesn’t stop you to plan for next year. Maybe start marking down on a list online such as “Giftster” or your iPhone notes etc what presents your family/friends would like for the next year. You can then budget for it by doing a lay buy it or grab it on a boxing day or mid-year sale. You can also allocate a specific amount of money each month for Christmas presents and put this away in an account so that you have the funds you need at the end of the year. Planning ahead for next year can help you stay in budget for the holidays and help you to have fun rather than to stress about upcoming expenses.
- Be creative
This tip splits people into two groups. You either read this and are starting to get excited with the creative juices already flowing…. Or you are looking to exit this article ASAP. But! No matter what group you are in, being creative can really save you on spending and possibly even make someone’s day. There are so many gifts you can give that are not material and it doesn’t mean you have to be good at craft. Have you perhaps thought of an experience? A lot of people do not want another gift at their age, or have very specific tastes, and it can be pointless to get them something from the store. An experience however, can really hit the nail on the head. These days there are a range of experiences available that you can purchase such as brewery tours, wine tastings, river cruises or golf. However, they can become expensive as well.
So the tips our north Brisbane financial advisers have to offer involve a little bit more effort. Instead of a wine tasting at a winery ($$$), how about you create one yourself with wines you already have at home? Instead of a degustation menu at a restaurant ($$$) spend time finding a recipe and creating a beautiful meal at home. Parents will often say that they just prefer to have the family together than a gift, so get creative and see how you can make their Christmas day by doing something special rather than buying something special. When you think about it – can you remember what gifts you received for Christmas last year? Compare that to the last time you spent quality time on an experience with a person you love. It is likely you remember the experience more. This year you do not need to get that craft box out to save money, rather, think of what the friend/family member would really enjoy and see how you can DIY.
- Cautious of the credit card
Lastly, but likely most importantly, be cautious, very cautious of using that credit card. In fact, we probably would lock it away in the month of December. If you are smart and strict with your credit card and utilise it for all the points and benefits without getting to the point of paying interest, then go for it – it will be a great month to accumulate that. However, it is quite likely that for many of us, we will “just put it on the card” and think to pay it off later. This can really sting you however if there aren’t any funds to pay it off later. So next time you go to purchase a gift, ask yourself where you are at in the month for the credit card interest, have you paid off what you needed to, and do you have the funds to clear it completely?
So there you have it – our 5 tips to cut costs this Christmas. And although this is not a tip to save money, it is our little piece of advice. Enjoy Christmas. At the end of the day, it is not going to be about the presents or the spending, but about who you are spending it with. So take time off to rest, relax and enjoy another year with your loved ones. Merry Christmas from all of us here at Lifelong Wealth.
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