Budgeting for Christmas (You know you want to!)

Not many sleeps till Christmas (gulp). Another year of soggy trifle, Uncle Bert’s bad jokes, endless Christmas Carols played on the cd (guilty) and perhaps the awful credit card hangover when it is all over. So how can you be Christmas ready financially? Well I am glad you asked as it brings me to one of my favourite words…..BUDGET! Music to my ears!

Sticking to a budget is hard at any time but it’s twice as hard at Christmas time. Everything is marketed at spending! Time poor? Then you are a marketer’s dream as you have a much higher chance of overspending in last minute rash decisions.

Budgeting is all about setting a target. Work out what you have to spend and then who you need to buy for.

Can you take advantage of a Kris Kringle style of giving in your family? This involves putting names in a hat, setting an agreed spending limit and just purchasing one good present for that person. If not, then how will you divide your spendings across your list of people.

If your budget comes up short then do not reach for the credit card but use a little creative brain power instead! For mature family members (think Nan and Pop) they just want your time, so write them a card with an offer to cook them dinner or mow the lawns. They will love this more than any fancy socks or soaps as they just want your time (which costs you nothing to give).

Young kids love quantity over quality so don’t get caught up in expensive items but buy in bulk – bubbles, a beach ball, totem tennis and a bag of sweets can all come in at under $20! It’s large and will keep them going all day.

Teens are harder and often want expensive items, you may need to pool funds with other family members to get them their preferred gift but they will appreciate this more than they will tell you.

To remove temptation surf the web at night and purchase without the influence of shopping centres displaying items you don’t really want. Most online services provide free returns but do read the terms and conditions before spending your money in their store.

If you must use your credit card then repay it as fast as you can. If you spent $1,200 on your credit card at an interest rate of 18% and you only repaid the monthly minimum it would take you 10 years and 8 months* to repay it this in full. Surely it is better to put $100 per month away over the course of the year and have no debt after Christmas.

Be organised, disciplined and creative. And enjoy a debt free Christmas.

*calculated at a $25 first month repayment. Min repayments are calculated as a percentage of your closing balance – as your balance decreases so will your minimum monthly repayment.

General Advice Warning - This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial or tax adviser before making any investment decisions.