Plan Smart to Avoid Over Spending this Christmas

November 18, 2015 - Posted in Budgeting, Money Saving

Restricting your Christmas budget doesn’t mean giving up all the fun stuff. On the contrary, it means getting rid of unnecessary spending to make room for the important things in life – whatever those things are for you and your family. Many families fall into the trap of stretching their budget too far at Christmas time and struggling to regain financial control through the first months of the new year. Avoid the Christmas spending trap this year by arming yourself with a plan to combat overspending.

1. Compile (and refine) a gift list

Write a list of people you need to buy gifts for this Christmas, refine it and set a budget for each person/couple/family. You don’t need to buy a gift for every extended family member, their partner and children. A good way to cut down on gift purchases is to buy group gifts for family units and friend groups instead of individual gifts for each person. Another option is to organise a Kris Kringle (Secret Santa) within family groups, friendship groups and amongst colleagues.

2. Be armed against impulse buys

Make every purchase count. Every time you put something in your shopping basket, stop and think whether it is an absolutely necessary item. Is it on your budget list? If it isn’t, you need to consider its worth – there’s no use rationalising unnecessary purchases with yourself when you’re the one who will lose out in the long run. If you don’t need to buy it, don’t buy it.

3. Search out sales, but stick to your budget

Impulse buying because things are “on sale” is the enemy of the budget – avoid impulse buys by keeping your gift list handy and sticking to your budget. If you come across something you prefer to what’s on your gift list, make sure it’s still within budget. If it’s not, don’t buy it on the spot. Go home and adjust your budget to fit it in or try to find a better price online. 

4. Budget for other expenses

Hosting, catering, entertaining, even being entertained can cost considerable amounts of money when you add up the costs involved. Be prepared for the holiday season by knowing what you’re in for and planning for the whole holiday. Too many people spend big in late December, forgetting the parties, barbecues and family gatherings that could take place throughout the New Year and January holiday period. You might not know everything you’re going to do this holiday season – after all, that’s the joy of holidays – but you can plan a rough budget and keep some money set aside especially for entertaining, catering, etc. You should also plan to keep a little money aside for holiday projects like renovations and property maintenance, just in case.

5. Keep the kids happy

If you have children, have a plan for how you’re going to keep them entertained over the summer holidays without breaking the bank. You might need to make an investment in valuable games, sports or hobby equipment (or even memberships, like at the community pool) at the beginning of the holidays to avoid constantly forking out cash for new activities.

6. Plan for next year

Saving for the next Christmas season is the most important thing you can do to avoid overspending at Christmas time. If you set aside $50 each month (including December) you will have saved $600 by the time Christmas comes around – ample money to cover gifts and entertaining for an average family. 

The tips above will all help you keep your spending on track over the holiday period. Remember: Make plans and budgets – then stick to them! You’ll find yourself enjoying your Christmas and New Year instead of dreading the financial burdens that go along with it.