The most wonderful time of the year is almost here. Everyone loves to spend quality time with their families and friends. They also love spending on gifts, vacations, and sumptuous food as a way to celebrate the holidays. Still, it is important to be conscious of how you spend your money to avoid financial strain during this jolly season. Here are some strategies to save money at Christmas.
Learn from Christmas Past
Before anything else, go to a quiet place and reflect on how you have dealt with the previous Christmas. Consider what things that you might want to do differently for the upcoming holidays. Did you spend more than you thought you would? Did you feel pressured to create a Christmas beyond your financial means? Try to throw that off this year and start afresh.
Make your Christmas List, Check it Twice
Anticipate how much will be your expected income and expenses for the Christmas holidays. Generate a budget that you can use in spending for presents, entertainment and travel. Stick to your budget, be thrifty, and avoid unnecessary expenses to make sure that you’re on track with your spending goals.
Save more, Spend Less
Christmas is a great time to encourage children to save money and manage their finances. During the holidays, they can do house chores for pocket money. You can consider putting some of their earnings aside or setting up a goal savings account. Teach them the importance of saving and budgeting which they can take with them through life.
Bill Smooth your Christmas
You can minimise your December spending by laying-by larger gifts a few months before Christmas. Some department or chain stores offer a lay-by but it is important for you to organise your gift ideas earlier in the year. If you can work out what you are buying then, you can have the gifts paid off in fortnightly repayments.
Keep track of the Plastic
People tend to overspend on credit cards during the Christmas season. In fact, according to the Reserve Bank of Australia’s latest data, almost $51 billion is currently owed on credit cards, averaging of around $3,135 per card holder.
It is thus important to regulate your spending especially if you have outstanding debts on you card. You can opt to reduce your credit limit or to try to pay for items with cash.
Cut Christmas day food costs
If you are hosting Christmas at your house, you can consider keeping the menu simple and less of the usual Christmas trimmings. A simple classic meal can still work wonders especially when shared with your loved ones. Also, you can arrange for everyone to “bring a plate” so all the family pitches in and splits the cost and the effort. Another way is to buy pantry items for Christmas lunch in the weeks leading up to Christmas so you don’t have all the costs at once.
Along with the festive ambiance of Christmas, there are still some risks of unexpected events like theft, lost luggage, or damage to your house or apartment. It is important to make sure that you are fully insured for your travel and your home and contents are protected. This way, you can enjoy the Christmas holidays without having to worry if a problem occurs.
Plan for the next Christmas
Once Christmas is over, you should start planning ahead for next year. You could start by opening a high interest savings account in January and contribute a small amount to it every payday. Also, shop for presents throughout the year, especially during sales. This will spread your costs and make them more manageable.
With Christmas fast approaching, are you ready for the expenses and costs it may entail? BMG Wealth can help you with strategies on how to prevent financial drain on this festive season.
Talk to us and we will be happy to assist you!