It’s the end of the year and the holiday spirit is in full swing. Gift giving is a major part of the Christmas break and everyone likes to receive gifts. In the month of December 2017 a record $29billion was borrowed on credit cards by every day Australian’s, and the majority of this expenditure was for the purpose of Christmas.
My top 3 tips on managing your money this Christmas;
1.Prepare a budget before hand and stick to it
By preparing a simple budget that details the income likely to receive for the month of December, along with your normal household expenditure for the month allows you to see what surplus you have left to spend. Giving yourself a percentage of the left over surplus to spend on Christmas, not 100% of the surplus, gives you an idea of how much to spend on presents and this number can be further broken down to how much you can afford to spend on each person you are giving for.
2. Resist the urge to overspend
There are other ways you can show people you care, donations on their behalf, get crafty and make something, or maybe give them a fun voucher for a pamper day at home, there is also the option of the good old Secret Santa… there is a fixed spend for everyone and only one gift to buy.
Others ways you can stick to what you know is by setting yourself a time limit when shopping, get in, $kaching$, get out and if you limit yourself to only a few shopping locations you can reduce the possibilities of distractions and impulse buys. You can also do some research for gift ideas online first, going to the shops with not only a ‘who to buy for’ list but a ‘what to buy for who’ list will help you keep to your budget and avoid becoming overwhelmed.
3. If you are using credit to pay for gifts, have a plan ready to go for the subsequent months
Do some calculations and budgeting for the months after Christmas. If your credit card has 30 day interest free periods and you can pay this back within that period then this may be an option, however the majority of Australian’s struggle to pay back the borrowed amount within the 30 days thus incurring high interest rates (typically between 12% and 19%).
This is the season for giving, but as they say, it is the thought that counts and I am sure no ones friends and family would want a high price gift knowing it has put the giver in troubled waters for months to come.