Tis the season to spend smart! Christmas can be daunting money-wise and often puts a lot of pressure on our finances. Our 5 money mistakes to avoid this Christmas can help you to plan and avoid any financial headaches as we move into 2021.
1. Not sticking to a list
By not having a list/plan for Christmas purchases you run the risk of your spending becoming out of control. Putting together a list of who you will buy for and for how much is an effective way of making sure you set spending limits and stay on course when completing your Christmas shopping. Better still, a spreadsheet with what you will buy and when will help you budget for those more expensive gifts, so you don’t leave yourself out of pocket during December.
2. Overusing your credit card
The temptation of splurging on your credit card is more prevalent when it comes to Christmas. Try to avoid impulse purchases on your credit card over the festive period unless you absolutely must. Leave your credit card at home and focus on only using cash or a debit card – this will help you to spend more mindfully.
3. Buying too much at the Boxing Day sales
Before Christmas is over, Boxing Day sales begin. These sales can be very attractive and often encourage impulse purchases to stash away for next Christmas, only to completely forget that you purchased them by the time the next festive season comes around. Be mindful with any post-Christmas bargains you are tempted to pick up.
4. Not reviewing your 2020 budget
Avoid bringing any outstanding bills from 2020 into the new year. Try to tie up any 2020 bills before January so you can start the new year with a clean slate and a clear mind. There is no better feeling than entering the new year with your bills paid and finances organised.
5. Not considering gift options
If you are feeling the financial pressure this year – or just want to keep the Christmas gift giving budget a bit more manageable here are a few ideas you might like to try:
– Agree to a Kris Kringle approach with your extended family or friendship groups – so rather than buying for 20 people and spending $20 each – you agree to spend a bit more ($100 spend limit) but only on 1 person each. Benefits are that the receiver of the gift gets a more substantial and therefore most likely more useful gift, and your overall spend is contained, and you only have to think about 1 gift rather than 20 (phew – what a relief).
– Don’t discount the value of your time – and the gift of experience rather than “stuff”. Perhaps a gift to loved ones of a picnic date or gifting mum a night off from cooking, or better still providing vouchers for her to call on you for outings (a drive to a beautiful spot to enjoy a coffee in a different environment). Quality time is the key and being a bit imaginative creates value for both the giver and the receiver.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).