As Home Loan and Insurance advisers part of our Duty of Care is to try to help our clients achieve their financial goals but this time of year planning appears to go out of the window for many families as the festive season approaches. For this reason as next week we open the first window on our advent calendar, we have compiled the 12 budgeting tips of Christmas.
Tip 1- Set a limit on what people will spend on presents. The key to this is that the figure needs to be communicated, preferably written down, and most importantly adhered to. It is no good if a comfortable (but realistic) price has been agreed but then the budget is blown!
Tip 2- If your extended family has grown over the years the cost of gifts for everybody can become excessive. So, instead of purchasing for everybody, introduce a system where everyone puts their names in a hat, and draws out one person to buy for. Instead of spending $30-40 on 10 individuals you may end up buying something more significant and appreciated for $150-$200. The cost is less and gives the purchaser more choice and may provide a better quality present.
Tip 3- Christmas can often be about gluttony, and no better representation of this than in the Christmas meal. Whoever hosts the meal, could minimise the expense by encouraging everyone to bring not only a plate, but also those nibbles and drinks to get you through the whole day.
Tip 4- Save for Christmas spending throughout the year. Don’t just wait until December arrives to start thinking about Christmas. Many banks have great Christmas saver plans set up, but you can budget yourself, by working out what you spend on average at Christmas, then dividing this figure by 48, so that you can have the required amount saved a few weeks out from the day itself.
Tip 5- Use your imagination to provide personalized gifts. While home-made presents may not be within everybody’s artistic scope, we have heard of people exchanging time gifts, where “babysitting vouchers” can be given to allow parents some time out. Customised gifts can often mean a lot more to the recipient than something expensive.
Tip 6- Save rewards points from Store Cards, Flybuys, Credit Card, etc and use them to purchase gifts rather than using your hard earned cash or putting it on credit. You’ve earned those points on money already spent so why not utilize them rather than spending more.
Tip 7- Layby or Interest Free period purchasing can allow you to spread the payments for more expensive items meaning that the impact on your cash flow is lessened. Make sure that you still budget to complete the payments within the Interest Free period or you may be hit with additional expenses.
Tip 8- Purchase gifts when you see them throughout the year to avoid a huge expense in December. This will once again allow you to minimize the costs in the weeks leading up to Christmas, but make sure that you can still find the gift where you hid it!
Tip 9- Don’t think that the present has to be something that can be held. Think back to your childhood. Do you remember the gift that you were given or the fun times that were had? A well thought-out excursion or adventure could be a much more valuable gift than something beautifully gift-wrapped.
Tip 10- If you are having guests to stay for a few days over the Christmas period, set some ground rules regarding sharing grocery or cleaning expenses.
Tip 11- PLAN for everything! It is the lack of forward thinking that causes people to over compensate when buying for Christmas. Most years there is a huge amount of leftover food in every house that ends up being thrown out. Think about what meals you are having and how many people you are buying for, and cater accordingly.
Tip 12- If you absolutely hate the gifts that you’ve been given, don’t let the giver know, but be prepared to sell them on TradeMe after the festive season is over. That way you will have the option to spend the proceeds of the sale on something that you wanted but didn’t get or to start your savings for next year’s Christmas.
Some of these may work for you, some of you may already be doing them, and some of you may have others that we haven’t listed here, but hopefully they may help you to not fear the lead up to what should be a wonderful time spent with friends and family however you choose to recognize the season, without breaking the bank!
