Have you ever considered how much you spend on Christmas each year?
Christmas can be an expensive time of year, and according to comparison site finder.com.au the average Australian household will spend $1,010 on Christmas this year.
Many of us fund our Christmas spending from our savings, however one in four Australians won’t have enough cash saved to cover Christmas expenses and will have to rely on credit cards instead, potentially putting themselves in debt for the new year.
This year it may be further exacerbated by the recession, with recent unemployment figures showing roughly 1 in 10 Australian will be out of work this Christmas.
So we have put together some top tips to hopefully make this year’s Christmas a bit easier and a bit less of a hit on the hip pocket.
1. Plan ahead
- Open a Christmas savings account at the beginning of the year;
- Make a list early in the year so you can take advantage of sales when they come up;
- Reuse gift paper and gift bags saved during the year;
- Save on delivery if purchasing online by buying in bulk;
- Sacrifice one expense for the next couple of weeks - this could be coffee, takeaway or magazine subscription to help have some extra funds.
2. Instead of buying, try homemade
- COVID-19 has really shown us that having a personal touch really matters to people and what better way to emphasis this than making gifts for your loved ones?
- Don’t be afraid to think differently and give gifts of service by creating your own redeemable coupons for thing such as cooking dinner, a free car wash, mowing the grass or running an errand. The possibilities are endless.
- Cook at home and don’t be afraid to ask your visitors to share the cost of the meal by bringing along something extra food or drinks.
3. Secret Santa
- Consider organising a secret santa with your family or friends instead of the having to buy gifts for everyone – this is particularly useful for the adults.
4. Take up a small freelancing job on the side
- Given the popularity of platforms like Airtasker or Fiverr, what better way to make a few extra bucks than drawing on your skills to assemble furniture or gardening or handyman tasks, the possibility is endless. Here is a guide on how to create a side hustle.
5. Think different this year
- Send virtual Christmas cards instead of physical ones;
- Shop online (online can be cheaper for first time customers with discounts or credits on first orders);
- Use ‘price match’ offers as retailers compete to have your business this year;
- Don’t be afraid to set present dollar limits or suggest spending time together instead of exchanging gifts;
- Check your credit card interest rate and consider arranging a balance transfer to a 0% rate after Christmas;
- Consider joining a loyalty program to collect points towards free gifts or travel.
6. Things not to forget as we head towards 2021
- As we approach end of the year don’t forget to use any unused credits from your health funds, e.g. some health funds will pay for a remedial or sports massage which would be a great Christmas present for yourself;
- There will be a lot of unwanted gifts after Christmas, so if you are planning on buying something for yourself consider checking the second-hand market in January where you may be able to pick up a bargain;
- If you do receive unwanted Christmas present, try to return them for a refund credit voucher. Alternatively, you could try selling them - you won’t get the retail price for the item, but it is better than leaving it at the bottom of your draw.
It has been a hard year for everyone - it's important that you are looking after your financial health as well as your physical and mental health. If you need further advice on budgeting or money management as part of a wealth plan, find an adviser here.