Christmas is less than eight weeks away. Starting your planning now, while there’s still time, is the best way to avoid the stress of December and the financial hangover that can follow in January, when the credit card bill arrives and the usual bills are still waiting.
Plenty of households across Newcastle and the Hunter know that feeling. The six steps below will help you organise gifts, food and celebrations early, so you can enjoy the season and start the new year with your finances in good shape.
1. Shop the sales with a list
Black Friday (27 November) and Cyber Monday (30 November) are good opportunities to buy gifts for less, particularly bigger items you were already planning to purchase. Go in with a list of what you need, and stick to it. A discount on something you didn’t intend to buy is still money spent, and it’s worth checking that the “original” price was a genuine one.
Be careful with buy now, pay later schemes too. Spreading the cost doesn’t remove it, and the repayments can land in January alongside everything else. If you’re tempted by an impulse purchase, our 5 questions to ask yourself before any major purchase is a quick check.
2. Make a gift plan
Write down everyone you’d like to buy for, with a gift idea and a spending amount next to each name. A note on your phone is enough. Then add up the total.
Seeing the full cost in one place shows whether your plan is realistic, and it’s much easier to adjust now than in the last week before Christmas. A list also helps you avoid doubling up or buying extras you hadn’t planned.
3. Agree on spending limits
Where you can, set a spending limit for group gifts. Kris Kringle (or Secret Santa) works best when everyone agrees on a set amount up front, and most people welcome the clarity.
Be realistic about what you can afford this year, rather than what you feel you should spend. A thoughtful gift doesn’t have to be an expensive one.
4. Give Christmas its own budget
Add a Christmas section to your budget covering gifts, food, travel, events and the smaller extras such as cards, wrapping and decorations. Then start setting money aside for it now. Open a separate savings account, or use the savings goal feature in your banking app if it has one, and set up a regular transfer on payday. For example, putting aside $75 a week for eight weeks adds up to $600.
If you prefer a hands-on approach, the budget envelope method works well. Divide your Christmas cash into envelopes for gifts, food and events, and once an envelope is empty, that category is done. Our article on budgeting and managing cash flow has more on setting up budget categories.
5. Decide who is hosting and what it will cost
Hosting is where costs can creep up, from the main meal and drinks to decorations and extra seating. If you’re hosting, set a budget for the day early and plan the menu around it.
If someone else is hosting, offer to bring something. Asking each guest to contribute a dish, drinks or dessert spreads both the cost and the workload. Agree who is bringing what in advance, so nothing is doubled up.
6. Plan ahead for January
Christmas isn’t the only cost to plan for. January often brings insurance renewals, car registration and back-to-school costs such as uniforms, books and shoes, at a time when many households have less coming in over the holiday period. List what’s due in January and February, and set money aside for it now.
If you’re already carrying credit card debt, think carefully before adding Christmas spending to it. Interest can turn a modest overspend into a much larger problem that follows you through the year. And if the bills arrive and they’re bigger than you expected, don’t ignore them. Look at what you owe, what interest you’re paying and what you can realistically repay before taking on any new credit.
Get some help if you need it
A little planning now makes Christmas easier and takes pressure off the new year. If you’d like help building a budget that works all year round, it’s the sort of thing we cover with clients across Newcastle and the Hunter as part of our financial planning and wealth creation conversations.
Talk to Virtuous Wealth
If you’d like a hand planning your finances for Christmas and beyond, we’d love to help. Get in touch with our Newcastle team to book a no-obligation conversation.
This article provides general information only and does not take into account your personal objectives, financial situation or needs. Before acting on any information, you should consider its appropriateness, having regard to your own circumstances, and seek personal financial advice from a licensed adviser.
