We Are On The Countdown So Plan Your Christmas Spending

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Can you afford to keep saying, “It’s OK, I’ll put some money aside for Christmas next week” or “I’ll start buying Christmas presents next week”, but never get around to it?

It is now only a matter of weeks away before we hit the most expensive time of the year for most Australian families.

It is a time when we travel long distances to catch up with family, buy presents, celebrate and visit tourist attractions like at no other time of the year.

Now is the time to plan your Christmas spending

If you start planning your Christmas straight away you will find that Christmas spending will be so much less painful.  It is the lack of planning where we come unstuck.  Without plans we tend to overspend, don’t face reality and end up with a financial headache to start the New Year.  Who needs it?

When setting up a plan for your Christmas spending you are more likely to address the true amount of money that you can or cannot afford to pay for items.  There are less emotions involved and you get a much clearer picture of where your money can be allocated so that you can have a good time but enjoy it all.  It may mean some changes in that instead of going to a tourist adventure park which costs $250 for you all, you hire a BBQ boat for $100 and spend the afternoon on the water.  Planning makes these choices so much easier to make and also to implement.

Usually when a person does a budget they are encouraged to be conservative, but the Christmas budget is one that I find needs to be padded out a bit because most of us overspend in one area or another.  If you are running on a tight budget this year, be ruthless.  Try to think outside the square for your presents and give something different (and cheaper) rather than giving designer products.

To start your planning write down exactly what you would like to do and spend your money on for the holiday season. Cover any pre-Christmas celebrations, new clothes, drinks, food, presents, travel, decorations, etc.  Write down how much you think each item will cost, then if you cannot afford the total amount, start working on what you can change and how much you need to clip off each expense.  Come up with alternatives where you can and eventually arrive at the final figure you are prepared to outlay for Christmas and the holidays.

Budget your money for Christmas spending

If you have not set up a Christmas savings account for this year it is almost too late so the best option would be to allocate money each week to buying for the Christmas period.    With your list in hand, each week buy certain items and tick them off the list.    Another option is to lay-by the more expensive items and this has a two sided effect: it reduces the final payment of the expensive item, and it would probably be one of the most important, so you know you have it already organised and you won’t be tempted to overspend when it gets closer to Christmas.

With 3 months to go you may feel that you have not got enough money to buy everything you want to, but are prepared to put some costs on credit card.  Consider this carefully and make an effort to only put on a credit card what you can pay off in the first month or two.

Start cutting back in your everyday living expenses now and that will give you some extra cash to put towards the holidays.  Encourage the whole family to be in on the Christmas savings plan as they will all benefit.

Are you travelling away this year?

Many families routinely travel at Christmas but it is a time when costs are at a premium.  Would it be worth considering having a Christmas in July celebration when travel is so much cheaper?  If not, start doing some comparisons on prices so that you can get the best fares available.

Present giving

“It is the thought that counts.”  How many times have we all heard that?  Is this a time when some lovely homemade biscuits, sweets or chocolates will be so appreciated?   The thing is, if you know someone who has had a tough year chances are they would just love to be treated to some chocolates or flowers.  These are luxuries that you just cannot afford when money is tight.

Check out that present list and make sure you can afford it.  It is just as important to be smiling after Christmas as it is before Christmas!

Do you really need to go to that Christmas function?

Before accepting invitations check out how much it is going to cost you to go to a certain event.  Are gifts involved?  Is there a cost to attend?  All these costs add up so it might be a time to bow out gracefully.

If you are going to go but are worried about your clothes, have a flick through some magazines and see how you can cheaply dress up what you already have.  Mixing and matching is the art of looking good.  For the lady it could be a lace top that goes with several dresses, jewellery or some other trim that does the job perfectly.  For the man a new shirt that can be worn with several different trousers would do wonders.

Those extra expenses

It is a time of year when expenses just seem to keep mounting and that is because we are in a hurry and don’t have the time to really shop around.  This is why starting to shop early can save you so much money.  Impulse spending seems to be ever increasing as we head towards Christmas and the ‘silly season’ bug hits us.  If you are in the habit of buying some new decorations each year, maybe this year you could give this a miss.  It is little savings like this that will help your spending budget.

Getting rid of that holiday debt

After all the fun is over there may still be expenses to pay.   Few people get through the holiday season without putting something extra on their credit card.

Having done your Christmas budget early you may have decided to put some expenses on your credit card.  What needs to happen after the holidays is to try and pay off that credit card balance as soon as possible.  It may be that you have to keep your everyday budget tight for another month or two to get that credit card paid down.  Every effort should be made to get the credit card back under control otherwise the interest charges will continue well on into the New Year.

Plan for next year

Most Australians have had a rough 2009 financially, or at least an uncertain one and from this comes the obvious Christmas solution and that is opening up a Christmas savings account early in the New Year.  Set it up in such a way that a payment is made into it automatically every time you get paid and next year you will be able to have a great time, all paid for upfront!

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