With the popularity of “Buy Now, Pay Later” services such as Afterpay and Zip Pay, credit card debit is not likely to be as high this year. We’re not travelling as much and with many people who have lost work, businesses or had their income reduced, the appetite for a big Christmas is muted.
According to Finder report – Christmas spending statistics 2019, in 2019 Australians spent over 18.8 billion on Christmas, with an average household spend of $969. Over 5 million Australians funded their spending on credit, with 19% on credit card and further 7% on Buy Now Pay Later services.
To help you manage your funds over this Christmas and beyond, its vital to make a plan and monitor your spending. We have compiled a list of tips to help you avoid overspending:
Set a Budget
Divide your budget into three different categories: How much you want to spend on gifts? How much on travel costs? How many special events during Christmas and how much will they cost?
Take half an hour out of your evening at home to sit down and sort out how much you can afford to spend on gifts this season, list the people you need to buy gifts for, and figure out what you could get them within your budget. Most importantly, stick to the budget!
If the numbers are not lining up, then you need to look at where you can make sacrifices within your budget. You may need to cut down on Christmas parties this year, in order to keep to your spending budget or maybe suggest a family Secret Santa for a growing extended family that is killing your budget.
Establish expectation early
Ensure you tell your family that you’re cutting back spending early on and explain to them about your decision and why you decided to make it. Similarly, if you intend to take a new gift-giving approach to your extended family, it is helpful to inform them early about your decision and why you decided to make it.
Suggest a family Secret Santa
It’s recommend to do Secret Santa for adults only in your family. Put all the adults in the draw each year and then you can choose how you wish to give gifts for the children in the family, whether it may be a small gift for each child, as Christmas is all about the kids right?
There are a many benefits to having a family Secret Santa including spending much less overall, less stressing over what to get everyone, the ability to get a great gift for one person and save time on shopping.
Start your shopping early, not the week before Christmas, buy gifts when you see them. Look out for sales throughout the year. Also take note, this week is the biggest retail week on the calendar with Black Friday on the 27th November followed by Cyber Monday on 30th November. Beware of overspending and using your credit card to make the purchase, as it could mean that you lose the bargain, so stick to your budget.
Ensure you shop around and look for bargains in op shops, antique stores and secondhand bookshops. It’s a great way to find a unique gift that no one else will have and save you some cash at the same time.
If you’re in a relationship, consider setting the spending limits or perhaps just buys gifts for kids this year or take yourself and your partner out for a nice dinner instead.
Track your spending
Avoiding overspending during the holiday season may not be easy. It certainly requires extra time and effort. But trust me, your January-You will thank you for it.
Resist the urge to treat yourself
Beware of retail marketing
Reduce spending at Christmas parties
Also, why not consider your health when attending Christmas parties? Give a thought to your health before going out for the third time in a week, and not only will your body be grateful, but your wallet won’t be too upset either.
Save on travel over Christmas
A summer break can be more expensive than you think and can often become the biggest cost of the Christmas season. A way to keep costs down, is why not go camping? If you family is the outdoorsy or adventurous type, it might be the perfect way to escape and keep costs down. While there are still a handful of costs such as petrol, site fees and food etc. camping is generally considered cheaper than any other type of holiday.
You might be able to afford a full-price summer holiday, but a bit of a discount goes a long way towards your Christmas budget! Keep a close eye on bargain holiday sites such sites as Lastminute, Wotif.com, and Airbnb or Stayz, where you might find the same or a similar holiday for a lower price. Shopping around never hurt anyone!
Another option is going on small day trips and exploring small country towns close to home. You’ll get the same feeling of exploring a new place and with the added benefit of saving on accommodation costs.
We hope our article has helped you with your spending over the busy Christmas period and from all the staff Oracle, we wish you a Merry Christmas and an even better New Year.
If you need any assistance with your cash flow management or savings goals, why not speak to financial planner?