1.)    TRACK YOUR SPENDING

If you don't know where your money is going, you may end up spending a lot more of it without even knowing. It may be helpful to track your spending on the months leading up to the festive season, this process lets you know if you're going overboard and highlights any problem areas. It also offers an indication of where to cut back on extras such as eating out, coffee or movies etc. There are always things you can trim back in a budget. Remember to be realistic about what you’re prepared to sacrifice. An example would be to use the money that you would normally spend elsewhere such as your monthly clothing budget on holiday gifts.

2.)    BUDGET FOR EVERYTHING

Take time to review your budget and use this as an opportunity to decide how much you can afford to spend on gifts, food, activities etc. over the holiday period. Holiday funds should come from your current disposable income. There are a lot of things people don’t think about for instance, gifts, shopping (fuel, parking), decorations, food, drink and travel make sure all additional spending is included.  Budget based on your own finances and set limits that you will stick to avoid racking up the credit.

3.)    HAVE A SPENDING STRATEGY

Make sure you know how your extra spend is going to be financed and use your savings wisely. Maybe it means withdrawing money from a savings account, in which case make sure you access the money from the account paying the least interest.

Set limits, by controlling what you buy to what can safely come out of your bank account. If you don't have the money to pay for your Christmas purchases up front, you may be tempted to use your credit card, or a buy now pay later scheme such as Afterpay. Although these are convenient ways to get the things you need now, that convenience can cost you long term. You do not want to find yourself still burdened with Christmas debt into the New Year.

Before signing up to a buy now pay later scheme, make sure to understand what the terms and conditions are, how much repayments will be, and when they will be due.

4.)    MAKE A GIFT LIST

The list should include everybody – family, friends, colleagues and anyone who needs to be recognised during the holiday season. Once identified, figure out the cost of each person and set a firm purchase price for that gift. Be realistic and work within your budget. If gifts are to be minimal, make sure expectations are clear to prevent gift giving guilt. This is also the time to discuss reasonable and economically achievable gift giving strategies with family and friends, you may want to do something different such as homemade gifts, name exchanges or just skip gifts altogether. Remember you do not have to spend a fortune to give or to find something perfect for someone.

5.)    LEAVE YOUR EMOTIONS AT THE STORE DOOR

Emotion and spending don’t go hand in hand and giving gifts deals with emotion. In order to keep your feelings out of shopping, consider keeping a list of all other financial obligations such as mortgage payments, car repayments, ATO payments, credit card debt etc. When tempted to overspend, remind yourself of these things and what you owe. Remember less time in a store generally means fewer purchases and if needed shop with cash which may help limit impulse purchases. Try not to allow yourself to be pressured into spending more than you can really afford.

6.)    START SHOPPING EARLY

Take advantage of the many sales throughout the year, shop around and look for deals, a lot of items are on sale at times when nobody’s really thinking about it. It’s good to bargain hunt and work the sales, if a gift on your list is on sale, buy it and store the gift until ready to be wrapped and gifted for Christmas. To be notified of retailer’s big sales, sign up for email alerts to get a heads-up. It’s advantageous to start early to avoid leaving it to the last minute, this can keep your Christmas spending under control and prevents the stress of the Christmas spend.  Try to make sure you’re not buying stuff that’s not on your list otherwise you’ll go over budget.

7.)    UTILISE ANY DISCOUNTS

Use discount codes and coupon codes. There are many online sites for example: Honey. These sites show you what coupon codes are available for the places you're shopping at. These services make it incredibly easy to save time and money. Also, if you have signed up for email alerts, check if there has been a discount code recently sent to you, any discount you can get will save money. Don’t forget to check if you have any credits on your store loyalty cards and cash them in to help finance your Christmas spending.

8.)    HOLD ON TO YOUR RECEIPTS

Keep any receipts for purchases in case presents need to be exchanged or refunded.

9.)    KEEP A RUNNING BALANCE

It’s good to keep a tight check on your spending. Record the total running balance of spending in a notebook, on your mobile phone or tablet. Bills will come in after Christmas, if you know what the bottom line of your spending amounts your card/s are, you’ll be in a better place to manage them. Pay off credit card debt as quickly as possible, and if possible, pay it off in one lump sum.

10.)  GET YOUR FINANCES ON TRACK IN THE NEW YEAR

Once Christmas is over, it’s time to set some new year financial resolutions. Consider taking a moment to meet with a financial advisor or your tax professional to review what worked for you and what didn’t and make changes for the year ahead.

We hope that these tips help you to navigate the financial mind field of Christmas even more effectively!

Disclaimer: This information is general advice only, if you want professional advice please consult your advisor or contact us for further information.