CHRISTMAS BUDGET TIPS

Christmas is a time where many people throw caution to the wind and just buy what they think will make everyone else happy – often just charging the purchases and dealing with the outcome in January.

 Are you being attracted by the promise of interest free Christmas deals??  The “buy now, don’t pay until the New Year” slogans are beginning to appear in your letterbox and on TV commercials. 

 With advertising and the media increasing expectations of the “perfect” Christmas, it can be easy to fall into the trap of spending money you don’t have.

 Interest free deals and credit may sound like the key to a very merry Christmas but they could leave you with bigger debts to pay in the New Year than you may realise.

 You need to think about what your future expenses will be for when hire purchase payments start coming out of your bank account or your credit card bill arrives in the mail.

 If you spend $5,000 on your credit card or borrow this amount from a loan company this Christmas, your minimum repayment is likely to be about $250 per month and that’s on top of your regular bills – rent/mortgage, power, phone etc and don’t forget the added expense of back to school costs in the New Year.

 This is not a good strategy because it only causes more stress.  Instead of spending blindly create a budget – tell your money where to go instead of it telling you where to go!!

 Decide realistically what amount of money you can spend on Christmas.

 Remember your Christmas budget is more than just the gifts you buy.  Think about

•  Baking ingredients – for Christmas Cake and pudding…

• Meal ingredients 

•  Activities for you and your partner/children

•  Clothing – for special parties to go to

•  Entertaining foods/beverages

•  Decorations

•  Postage

•  Christmas Cards

•  Any other items you may normally spend money on during the holidays

•  Gifts

 Look at what CASH you have on hand to spend.  In a perfect world you would be saving and buying items all year long however since many of us start later in the year it is important to really take a look at where Christmas money will come from.

 Divide up the amount of money you have to spend among the categories listed above.

 Take some time now to plan ahead, budget within your means and set realistic expectations for your family and friends.

•  Set a budget for Christmas spending based on what you can afford and stick to it.
• Make a shopping list of the people you need to buy presents for and write down the amount of money you can afford to allocate next to each name
• Pay for presents using cash or lay-by
• Talk with family and friends about setting a maximum limit on gifts.  You may decide to buy for the children only, or buy for just one other person rather than for everyone.
• Plan ahead.  Avoid the last minute rush.
• Make use of specials and sales throughout next year to buy presents for next Christmas.
• Open a Christmas savings account – if you put away $10 per week, you will have over $500 by Christmas, or buy supermarket Christmas vouchers, one each week from the beginning of the year.
• If you must use your credit card or borrow money, set your limit and budget to have all the expenses for Christmas paid off within three months. 

 Remember you do not have to spend a lot of money to have a wonderful Christmas!!