With the right planning and discipline, managing your money in the lead up to Christmas can be simpler than you may think. Taking the time to not only prioritise your spending but to also weigh up what’s most important can leave you in better stead in the long run. The Christmas season is, after all, about creating memories, not debt.
Prioritise your existing financial commitments
Although splashing out on the best and biggest presents for your loved ones may be something that many of us aspire to, this should not be at the expense of your existing financial obligations. Whether it’s a personal loan repayment, a credit card payment or your regular utility bills, paying these on time should be your main priority. If you’ve needed to defer or reduce your repayments in previous months, it can be a good idea to budget a little more than you need for your repayments while you get back in the rhythm.
Try not to dip into your rainy day fund
After the year we’ve all had, it might be tempting to dip into your rainy day fund so you can afford the Christmas celebrations you’ve been dreaming of. While it might sound like a good idea now, doing so can actually put you on the back foot financially in the new year. If you can help it, try to leave your emergency fund intact for when you really need it most.
Stick to a budget
We all know that Christmas can be an expensive time of year, especially when you factor in the costs of presents, food and festive events, but it’s a good idea to stick to a budget if you can. Before you start spending on gifts and other purchases for the silly season, list out all your anticipated expenses. Using this list, prioritise your spending, allocate a realistic amount of money to each and try to cut out any non-essentials.
Track your spending
Once you’ve set yourself a budget for the Christmas season, it’s important that you keep yourself accountable. Whether you use a budget tracking app, a spreadsheet or a simple list of all your expenses, ensuring that you don’t exceed your budget is key to managing your money in the leadup to Christmas. Being aware of where you’re spending your money can be a real eye-opener, but it’s a great way to keep yourself on track.
Spread out your spending
Leaving all your Christmas shopping to the last minute can really take a toll on your hip pocket, especially if you’re trying to stick to a strict budget. Spreading out your spending across the weeks leading up to Christmas can be a good way to lessen the financial strain that this time of year can put on your wallet.
Consider taking advantage of Black Friday and Cyber Monday deals to ensure you get the best deal available. Although it may take a little organisation on your part, drawing up a grocery list ahead of time can be a good strategy too, allowing you to see which pantry items you can purchase in advance.
Make a gift shopping plan
Without a solid plan, Christmas shopping can not only be expensive, it can blow your silly season budget. Before you hit the shops or start adding to your cart online, take a moment to draw up a list of each person you plan to buy a gift for. Assign a gift budget to each recipient and start brainstorming gift ideas. Having some idea of what you plan to buy helps you to avoid shopping aimlessly or panic purchasing.
If your money is better spent meeting your existing financial obligations than buying gifts, getting creative can be a good way to save cash. Consider alternatives, like baking cookies for family and friends, or getting crafty with a special DIY gift. Buying gifts for a large family can also be an expensive exercise, so if it’s an issue for you, it might be worth floating the idea of a family Secret Santa.
Don’t be afraid to talk to your lender
If you’re really feeling the pinch this year, get in touch with your lender or creditor to discuss your payment options. You might be able to reduce your repayment amount in the short term to help you get back on top of your finances. It’s always best to talk to your provider if you are struggling, as missing payments or having a default added to your credit profile may make getting approved for credit more difficult in the future.
If you’re considering taking advantage of a lower repayment amount or are considering deferring payments, it’s important to remember that interest will likely continue, your loan term may be extended or you may be required to pay a lump sum at the conclusion of the extension period. These terms will vary between lenders, so it’s best to discuss your circumstances directly with your lender.
Keeping well during COVID-19 and the festive season
If you are suffering financial stress or other mental health issues, contact the National Debt Helpline on 1800 007 007 or Lifeline on 13 11 14.