Troy MacMillian sat down with the West to share his tips on how to enjoy the holiday season without emptying your bank account.
Question 1: Can you give us your top 5 tips on how to enjoy the holiday season without emptying your bank account?
1. Plan for Christmas
“Most people don’t plan to fail, they fail to plan.” ― John L. Beckley.
When it comes to Christmas, some simple planning goes a long way to ensure your festive season is enjoyed without any associated financial pain. Planning should include:
- Make a shopping list. Start the process by writing down the list of people you plan on buying gifts for this year. This is the time to consider who should be on your gift list and who doesn’t make the cut! Start with your immediate family and close friends, and selectively add to your list from there.
- Set a spending limit. It’s easy to overspend on Christmas gifts by letting your emotions get the better of you. Therefore, it helps to figure out the total amount of money you want to spend on presents, and then divide this figure up amongst each person on your list. As an example, if you decide to spend $600 on presents this year, you might choose to allocate $300 for your children, $150 for your spouse, $50 for your parents, and so on.
- Create a Christmas savings account. It’s difficult to keep track of your Christmas spending and to know how much you must spend on presents if you have only one account where all your expenses and income comes from. A separate savings account just for Christmas expenses will give you a clear idea about how much money you have available for spending.
2. Use a Christmas budgeting app
To keep on track with your spending over Christmas, there are number of apps on your phone that can help such as ASIC’s MoneySmart TrackMySPEND.
3. Buy and sell in the secondhand economy
Instead of buying new gifts for everyone on your list and spending big on decorations, consider shopping around on sites like Gumtree and eBay or local second hand stores as you may be surprised by what you find.
To fund these purchases, you could also look to sell any unwanted or unused items from home. These items could even include Christmas gifts from last year that were never used or have just become unloved over the year.
4. Avoid using credit cards
The easy option this Christmas is to charge all expenses on your credit card, but it can come back to hurt you. If you do not repay the amount owing by the end of the month, then you will have to start paying interest at very high rates. Then if you continue to only meet the minimum repayment, you could be repaying the credit card for many Christmas periods to come.
5. Organise your bills
Getting organised and paying your bills that are due around Christmas early means that you will know exactly how much money you have leftover to spend on Christmas shopping.
Then once the Christmas bare necessities are bought, try and arrange to pay all your bills that are going to fall due in January as well. This will reduce the stress or non-payment, keep your credit rating clear, and give you a much better idea of what you can truly afford to spend on any “extras”.
If you know that you’re going to run short, then get on the front foot to phone the bill issuer to try and negotiate a payment plan.