Pretty soon we’re going to start seeing advertisers including the word ‘Christmas’ in their ads as we ride the financial rollercoaster toward the last quarter of the year.
And for many of us, although Christmas brings with it the thought of a busier social calendar, it’s also traditionally the most expensive period of the year – which more than often results in a financial hangover that ironically occurs at the same time you’re trying to celebrate the promise of a fresh start to a New Year.
So if you’re a borrower who’s really feeling the pinch from rising rates and that scenario all too familiar to you – the very thought of it should be enough to make you read on…….
Below are a few strategies you can apply now to ensure there’s still coin left in your Christmas pudding.
It all effectively comes down to how you manage your cash flow leading into the December period. And by managing cash flow, I mean looking at ways in which you can set aside some funds from your regular household income to be used to pay for any pre-Christmas related expenses so you don’t blow the budget.
And this is best tackled by looking at the Gold, Silver and Bronze culprits that can lead you into murky financial waters:
GOLD MEDAL CULPRIT
PRESENTS, PRESENTS AND MORE PRESENTS
Let’s face it – buying presents for kids alone can add up all too quickly. But when you also add in gifts for your partner, your family, work colleagues and the just-in-case generic variety that can be produced to avoid those embarrassing moments when you unexpectedly get given a present you weren’t expecting… the cumulative effect can be crippling. So the best plan of action is:
- Buy a present each week from now on and absorb it into your regular weekly/monthly outgoings.
- If you find yourself giving-for-the-sake-of-giving with either family, friends or work because it’s become a habit – have a chat and tell them that while you still love/appreciate them, it’s time to hang up the boots.
- Hunt around for the cheapest offer on the gift you were thinking about. Online auctions, online shops and retailers having serious sales can routinely save you half the price on many items.
- Rethink your gift options. If you’re planning to buy something that you know will only put more pressure on your finances, save it for another time when you know you can afford it and go for something less expensive – combined with a special gesture by you that they can’t put a price on.
SILVER MEDAL CULPRIT
THE CHRISTMAS SOCIAL WHIRL
Aaah…. the lure of all those social invitations that seem to fly in your inbox as you hear that all too often catchcry of “We must catch up before Christmas”. And this is the point where you should instead be thinking, “Why can’t we catch up after Christmas?
It’s OK to occasionally say no to a social invite and it’s also OK to have a simple get together at home, rather than catching up over drinks which may cost $10 a pop. So think about what it’s actually costing you in food, drinks and perhaps your health and downgrade your plans to save the damage to your hip pocket.
BRONZE MEDAL CULPRIT
THE CHRISTMAS HOLIDAYS AND THE NEED TO ‘GET AWAY FROM IT ALL’
Too often we hear people talk about how tired they are at Christmas, how it’s been a big/stressful year and how it’s been so hectic into the lead up to Christmas etc etc. Then, even if they’re not financially prepared for it – the same person decides they simply must organise a trip away to get away from it all, and in doing so, put more financial strain on themselves so the cycle continues.
The problem here is that by spending money you don’t have over the Christmas holidays because you feel it will magically revitalise you, it can have a double negative effect. This is because you’re usually paying peak season rates wherever you decide to go in Australia and the compounding financial effect of that, on top of additional pre-Christmas spending can take the rest of the year and beyond to try to recover from.
So my advice is either stay at home and enjoy the simple things or put off your break until another time in the year when you can pay off-peak rates and above all, remember to be clever about what you financially do in the year ahead so you don’t find yourself in the same situation, one year on.
Tags: affordability, Budget, Saving