7 steps for enjoying Christmas without the financial stress

4 min read

Christmas is just around the corner, along with a hectic round of parties, family get-togethers and gift-giving. By the time the New Year rolls around your waistline might not be the only thing showing the strain.

To make sure you start 2017 fit and refreshed, rather than financially flattened, here’s a seven-step plan to consider for managing your upcoming expenses.

1. Create a budget

Any money you can put away now will take the pressure off over Christmas. Work out how much you can afford to spend on gifts, food and drink and a trip away and stick to it.

"Budgeting is the most important thing. Use a spreadsheet or use one of the many budgeting apps available to track your spending", says Michelle Hutchinson, money expert at Finder.com.

2. Be a sensible Santa

If money is tight, you could talk to family and friends about setting a dollar limit on presents. Rather than buying a gift for everyone, consider a Secret Santa or pitching in as a group to buy big ticket items. “Maybe you could agree to buy gifts for children only, or a shared item for the household”, says Hutchinson.

Gift cards are a good idea for children and teens so they can stretch their money further by shopping at the post-Christmas sales. And don’t overlook old-fashioned lay-by where you pay for retail purchases in instalments, rather than using credit.

3. Start early

Nothing is guaranteed to ruin your mood on Christmas morning more than running yourself ragged on Christmas Eve shopping for last minute gifts. So save yourself time and money by starting your shopping early. Draw up a gift list with price limits and shop only for those items.

If you enjoy cooking, you could kill two birds with one stone by setting aside a day to make Christmas treats for your own table and to give as gifts. Christmas cakes and puddings can be made as much as six weeks ahead. Not only does homemade taste better, but you could potentially save a packet.

4. Do your homework

Before you hit the local shopping mall, research the market and compare prices online. Hutchinson says you can potentially save money by shopping online for coupons, vouchers and special deals on everything from clothing and wine to international flights. Sites include OzBargain, RetailMeNot Australia and Finder Deals. If you decide to buy online, make sure you leave enough time for delivery before Christmas.

5. Eat, drink, save

Entertaining goes into overdrive from early December through to the big New Year’s Eve celebrations. To avoid a debt hangover, party smarter, not harder. If you are hosting a gathering, ask everyone to bring a dish as well as something to drink. This could not only save money but it could also save you the stress of preparing everything yourself.

"Set yourself a budget, look for discounts and buy food in bulk from wholesale markets", says Hutchinson.

6. Use credit wisely

Before you begin spending, it's a good idea to review your credit card. Australians' average credit card debt currently stands at around $4,300 per cardholder, with an annual interest bill of $700 if the interest rate is between 15% to 20%.1 The interest alone could buy a lot of Christmas presents. So if you plan to give your credit card a workout this Christmas consider shopping around for a good card deal.

7. Holiday at home

After recent falls in the Aussie dollar our money doesn't stretch as far for some destinations overseas as it did a year ago, so why not holiday in your own back yard instead? Not under the shade of the Hills Hoist but under the stars at one of Australia's thousands of picturesque camping sites. If you like a bit more luxury, you could rent a room or a whole house via Airbnb for potentially a fraction of the cost of a hotel.

Budgeting and planning ahead may not help your waistline, but it will do wonders for your bottom line this festive season.

1. ASIC MoneySmart credit card debt clock, 21 August 2015

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This information is current as at 15/08/2016.

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