Q: I love Christmas and spending quality time with family, but it’s always such a drain on the finances. Do you have any tips or ideas on how to save money at Christmas?
A: Christmas is around the corner and it can be a very expensive time of year.
Being conscious of your expenditure is a good start, but there are other steps you can take to help avoid common financial pitfalls that arise during the holiday season and reduce Christmas spending.
Budget for Christmas
The first and probably the most important is to establish a budget, estimating your income and expenditure over the Christmas break, with the key ingredients being presents, entertainment and travel.
By sticking to spending goals, buying for your budget and keeping track of how you’re going against your plan, you can avoid unnecessary financial stress. Budgeting will also help you free up some extra cash to celebrate with your loved ones.
Monitor your credit card debt
The Christmas season is well known for over-spending on credit cards. The Reserve Bank of Australia’s latest data tells us that almost $51 billion is currently owed on credit cards – that’s an average of around $3,135 per card holder.
If you are going into the Christmas season with outstanding debts on your card, it is even more important to rein in spending and attempt to make your monthly repayment more than the minimum amount to help you manage Christmas debt.
Still remembering your indulgent Christmas by the time Easter comes around is preventable, as are unexpected events such as theft, lost luggage, or damage to your house or apartment. By making sure you are fully insured for your travel and your home and contents are protected, you can feel a little more comfortable and experience less pain in the wallet if a problem occurs.
Save not spend
For families, Christmas can be a great time to encourage children to save money and take control over their finances. If they score a casual holiday job or do chores around the home for pocket money, it’s a good idea to put some of their earnings aside or set up a goal savings account. These are important steps in educating them about the power of saving and budgeting; important skills that they can take with them through life.
Do you have a question for John? Leave it in the comments below and check back each Sunday to see if your question has been answered!