When we talk about holiday blowouts, more often than not we’re talking about the lapse in dietary judgement that comes with all those festive parties. But what about the financial blowout so many of us fall privy to?
To avoid waking up post – Australia Day (because we all know that’s when the festive season REALLY ends) with the financial hangover we call credit card debt, follow these tips from Anthony Bell for avoiding overspending this holiday season. Believe us, 2016 you will thank the forward-thinking 2015 you.
1. You can’t stick to something you don’t have
We all know the benefits of having a budget but the hard part is actually doing it. There’s no doubt that the mere process of completing a budget will prepare you well and make you think about what you can realistically afford to spend.
2. Kris Kringle / Secret Santa
Rather than give a gift to all family members, consider drawing a name out of the hat and give to just that person/couple. Some families will do this just for the adults and still give to all the kids. Every family is different, so work something out that fits best for your family’s circumstances.
3. Introduce a spending cap
Have an agreed cap in the amount that each of the family members will spend on gifts. This can reduce the pressure that would otherwise be there to spend more than you really should.
4. Monitor your spend and watch the use of credit cards
Having prepared a budget, monitor your progress as you go. It’s too late if you find out when that weighty credit card bill comes in the new year. Better still, save up and spend just from savings rather than on credit cards. Pressing “cheque or savings” rather than “credit” on the eftpos machine brings a reality to your spending and avoids a huge post Christmas credit crunch.
5. Credit card limits
If the credit is not there you can’t use it. It a good idea at any time of the year but particularly at Xmas time to think about keeping your credit limit as low as possible, whilst giving you a bit of head room for the true emergencies that can crop up. This helps with the temptation of the season and will at least limit the post Christmas financial hangover.
True emergencies aside, you need to plan to be able to pay off your credit card in full in each month. If this is not possible then you should cease using the card until you have paid off what’s due. If that is still not possible and you need to continue to use the card on necessities, then you need to urgently seek financial advice to develop a plan to address your credit card debt.
6. Consider boxing day/post Christmas sales
An increasing trend is to provide a “promise” card so you buy the gift in the post Christmas sales when you get far more “bang for your buck”.
7. Make a donation to a tax deductible charity
Instead of a material gift, consider making a donation to a charity. If they’re a “deductible gift recipient” you’ll get a tax deduction for the amount you donate.
8. Christmas hampers
Many swear by Christmas hampers as a great way of carefully planning for what you’ll need and saving money along the way.
9. Buy presents during the year when they’re on special
The savvy present buyers start thinking about Christmas the moment the last one’s over. This gives you the chance either in the post Christmas sales or indeed anytime throughout the year to get a bargain. If you can be this disciplined, you really can make a huge difference to your Xmas outlay.
10. Don’t get carried away
It is so easy to get caught up in the emotion of the season, particularly with all the Christmas marketing campaigns that abound. Your budget will help you do this, particularly if you’re susceptible to impulse buying.
11. Entertainment Budget
When you’re thinking about your Xmas budget, as well as presents there’s also those extra entertainment costs that often arise at this time of year, not to mention associated transport costs such as taxis.
If you have factored these entertainment related costs into your budget, you’re more likely to make more rational decisions whilst still enjoying the festive season and all that it offers.
12. Spending Apps
There are some very handy Apps around that at a very low cost allow you to track your spending in a far more user friendly way than ever before. If this works for you then embrace it! It’s less about how you budget and track your spending against your budget; it’s more about being sure it happens at all.
For professional assistance: www.bellpartners.com
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