Budgeting Over Christmas and the Holidays

HOW TO GET THROUGH DECEMBER DEBT-FREE   

It’s no surprise that December is always the most expensive month, but it might come as a bit of a shock when you find out how much we’re actually spending.

The average Australian spends 30 per cent of their income on discretionary spending on normal days, but during the holidays, that doubles to 60 per cent of their income, according to Pocketbook research.

Australians owe over $50 billion in credit card debt as a whole, which usually peaks in February - once the Christmas decorations have been taken down, resolutions have already been broken, and summer is coming to an end.

With a few quick tricks, it’s easy to have a silly season without silly spending. Here’s how.

PLAN, PLAN, PLAN

They say that failing to plan is planning to fail, and that couldn’t be more true at this time of year. Set a budget before the holiday season (i.e. now if you haven’t already done one) and clearly state the cost and the price limit. Include everything; gifts, food, decorations, parties. Set aside a certain amount for unplanned costs, too. Perhaps you have impromptu guests, a last-minute dinner invitation or need a present for someone you’ve forgotten.

Workplaces and friends like to plan Christmas parties in advance because December books up so quickly. After you save the date, start putting aside some cash you’ll need for the event. Whether you have to pay for drinks, dinner, a Secret Santa gift or everything, set a budget and start squirrelling cash away. The keyword here is cash. If you can’t afford to pay cash, you can’t afford it.

For gifts, planning ahead means no last-minute trips or eye-level supermarket temptations to quickly tick off a list. Again, some foresight will help make sure your credit card is getting unnecessarily swiped.

Don’t be afraid to get creative and be sure to shop around. There’s no reason to pay full price for anything these days, with retail sales happening all year round (Christmas, Boxing Day, end of financial year, spring sales, it never ends) and so much choice online. Keep an eye out for flash sales online, don’t forget to check the sales racks (usually at the back of a store) and don’t underestimate market treasures.

HOSTING WITHOUT THE EXPENSE

It’s a great time of year to catch-up with friends and family and there’s nothing more rewarding than gathering all your loved ones in one place. Hosting a lunch or dinner is stressful enough – who knew your house could get so messy? – and trying to cater all by yourself will see costs soar. Plan what you’ll need in terms of food and drinks, and don’t be shy when it comes to asking guests to bring a plate or a bottle of wine to share. They’ll appreciate having a designated item to bring and will feel part of the celebration.

Before you do a big grocery shop, be sure to compare prices online and keep an eye on items before the big day.

And as beautiful as those department store decorations are, there’s no reason you can’t get creative and make some just as nice. If you don’t have time or energy to get out the glue gun, the beauty of Christmas is that it’s the same every year, so last year’s decorations are perfect. To restock for next year, wait until after December 26 to buy Christmas cards, decorations and paper.

With a little bit of imagination and a lot of planning, you’ll be able to have a fantastic holiday season on a budget. Starting the New Year without a December debt will be worth it.

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