Budgeting for Christmas: will it dismantle your savings plan?
30 November 2020
Christmas is one of the busiest and best times of year - but what with all that food, the decorations and not to mention the presents to buy, it can get very expensive very quickly.
Here's how you can start budgeting for your holiday without throwing off your savings plans.
What is a budget?
The word budget can conjure up shudders and immediate elimination of all fun, but it doesn't have to be a dirty word. A budget is simply a plan to keep your spending controlled. Essentially you want to have a balance so you know you have enough money to pay for necessities and still make some savings.
Remember that everyone can benefit from an achievable budget, not just those who have trouble getting from paycheck to paycheck. Budgeting can help you be more confident about your money and better save for your future.
Budgeting tips for Christmas time
So what about your specific Christmas time budget? How can you make sure spending doesn't get out of hand and still manage to please everyone? Here are our top tips:
Make a list of everything
Planning, planning and more planning will help you to keep track of your expenditure and feel more in control of your wallet. Make an informed list of everything you intend to buy this festive season. This should include:
- Supplies: All the food, drinks, games and decorations that you agreed to provide should be here. If you are hosting, consider extra supplies that may be needed for people to stay over (think bathroom products and washing powder).
- Travel costs: If Christmas is at a friend's or a family member's house, try to work out in advance how much you intend to spend on driving or flights. Remember to include fuel and travel supplies. Working out discount deals or mapping out cheaper fuel stations can be a good way to cut costs here.
- Gifts: Finally, it wouldn't be Christmas without presents. List out everyone who you intend to buy for, what you want to get them and how much you are prepared to spend on each person.
Track your spending
The best way to avoid going over budget is to monitor your spending. You can do this the old-fashioned way, by collecting receipts and tallying them at the end of the day or week, or you could try a spend tracker app, such as ASIC's MoneySmart TrackMySPEND. This enables you to set spending limits on different categories of expenses so you know what you are spending, and where.
Savvy gift planning
Gift spending can always be a bit tricky and there can be pressure to spend big bucks, especially when it comes to kids. Fortunately, there are a few ways you can avoid going overboard:
- Consider a kids-only Christmas: Discuss with the adults in your family having a Christmas where only the kids get presents. This can be a great way to save, particularly if you are already providing food and drink supplies.
- Get in on the sales: Plan ahead and take advantage of the big sales seasons in the year to get great gifts for a reasonable price. Warning: sales are almost impossible to find in December so it's important to plan ahead.
- Consider buying second hand: Second hand doesn't always have to mean naff. In fact, in an age where we should be increasingly environmentally conscious, it's a fantastic way to make the most of your money and the earth's resources. Consider high end antique shops or second hand book stores.
- Set a present price limit: Sit down with your family and suggest a group price limit for individual presents.
- Offer time rather than products: Whether it's help moving house, cleaning out the garage or putting together the deck, help is always appreciated. Consider gifting time vouchers for all manner of tasks.
Cut corners when it comes to entertaining
Entertaining at your place is a great way to show hospitality but it can get pricey, especially if done at the last minute. Here are some ways to try and lighten the load:
- Share the burden: If you have guests, there is no need for you to expense everything. Consider asking people to bring certain things such as veggies or pudding.
- Find supermarket deals: Take advantage of the competition between shops and supermarkets.
- Make use of loyalty cards: If you are uber-prepared, you can build up your loyalty points and use them to discount your Christmas food shop.
- Don't go overboard: It's easy to go a bit mad at the festive season and buy far more than you will ever eat. Try and be reasonable about what you will actually eat so you don't end up wasting it.
If you want to get your money working for you, get in touch with the team at LGS for thorough financial planning and budgeting advice.
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