Setting a budget: How to spend less this Christmas
Before you open your wallet, work out how much you can spend this holiday season. What’s left over of your pay once you subtract your usual expenses (for example groceries, transport, mortgage or rent)?
If you’re doing it tough, David Rankin, founder of personal budgeting service Sort My Money, recommends taking the pressure off: Buy less presents, live within your means, and most importantly, “Don’t go into debt because of Christmas”, he says. “That’s my golden rule.”
USE THE CHRISTMAS EXCHANGE RATE
Rankin says money is a great gift, because you can get away with giving a smaller amount due to the “Christmas exchange rate”.
“Thirty dollars at Christmas is worth $50 any other time of year,” he says. His reason? Boxing Day sales mean their gift dollars go further.
SHOP SMART
Take your savvy online-shopper status up a level by making money as you buy. No, we’re not suggesting anything as energy intensive as selling your stuff on eBay.
It’s much easier, Kathy Sheeran, founder of the Shopping Confessions blog, says.
Whether you’re looking to buy groceries, a new outfit or presents, Sheeran recommends going through a cashback website to find your favourite online stores.
These websites then earn a commission when you buy from their featured retailers, but instead of keeping that money themselves, they split it with you.
“You get the money in dribs and drabs — $3 here, $10 there — so I opened a new savings account for the deposits,” Sheeran says.
“I call it my shoe fund.”
Check out cashrewards.com.au or cashbackclub.com.au
DEAL IN CASH
It’s easy to lose track of spending when you’re soaking up the festive spirit (and cocktails). The solution? Only make cash transactions otherwise it’s too easy to tap-and- go (and regret).
“If you can allocate a Christmas budget, and withdraw that in cash, you’ll spend within that budget,” Rankin says.
“You just have to be really disciplined.”
CULL THE GIFT LIST
Feel obliged to buy presents for the girls at yoga? Don’t, because other than wasting money on yet another bottle of no-frills lotion, Rankin warns, “It then becomes an annual commitment — not just for you but for them.”
Organise Kris Kringle instead.
START PREPARING FOR NEXT YEAR
Don’t let the shock of Christmas hit your wallet again in another 12 months, especially if you’re one of the Aussies who spend an average of $1079 over the holiday season.
“Christmas should be treated just like car registration,” Rankin says.
“It’s an annual financial commitment and, as long as you plan for it, you’ll be right.”
When you sit down to create your annual budget, include your festive expenses.
Work out how much you’ll likely spend, using this year as a guide, then put money away throughout the next 12 months towards your yuletide fund.
Originally published as How to spend less this Christmas
