With all the talk of zero waste and emissions in the run-up to this Christmas, I like to think extravagant Christmas spending and seasonal excesses may be as redundant as traditions like eating goose.
But don’t count on it. Spending big on Christmas presents few people need, eating and drinking more than is wise and lavish entertaining are just too baked into Santa’s DNA.
Yet the biggest regret after the event isn’t just the extra kilos around the belly. It’s also the absent dollars, or even worse the excess debt, come January.
1. What’s your intention?
The first step is to make a simple budget for Christmas spending. You want to see if your savings can meet your spending. Think about your financial goals for the season, such as to break even. Or maybe you’re okay to go over budget but reduce debt realistically over a set time.
Write down your intention in a few words. This year mine is: To give everyone I can a memorable, but not too indulgent Christmas, and reduce waste of food, unwanted gifts and unappreciated costs to a minimum.
OK, it’s only bare bones, but it’s a guide to flesh out the skeleton. So the kids say when it’s all over: “Thanks Mum and Dad, that was the best Christmas ever.”
2. How big is the piggy bank?
There’s a good chance you may leave this until last, or when it’s too late or worse, not at all. However, putting a number on your Christmas spending is a powerful tool. You don’t need to stick to it slavishly, but it can be a guide to help engrain the habit of budgeting all year round.
You may have wisely put aside a few bucks through the year or bought presents ahead of time in the winter sales. Maybe you’re planning on hitting the Black Friday sales.
Either way, include anything you have or intend to spend in the budget. Don’t let anyone see, unless you share this work with your partner. Define fair amounts to spend on children and family. Avoid spoiling them, but also think of being equitable to avoid any jealousies.
If your savings are insufficient, you may need to go into debt. Consider the costs of this and how long they will be hung around your neck, particularly if you have existing obligations to meet, especially on a credit card. There are tragic stories of families who are still paying off last Christmas, which everyone has forgotten when the next one comes around.
The Buy Now, Pay Later sector will entice new customers and extra spending that is their business model, but go in with your eyes open. Let this new service be convenient, but not too costly.
3. Be honest about what you can afford to give
Now it’s time to work out the realistic costs divided into food and drink, travel, gifts and other sundries. Try to include any amount, and it doesn’t matter how large or small, for charity and remind yourself what Christmas is really about.
In terms of gifts, I like to think of services instead of goods. Think experiences like massages, hotel stays and meals out instead of the usual boxed gifts, toys, socks and all the usual clutter.
Not only does this help reduce packaging waste and the resources needed to make these goods, but research shows an exemplary service thoughtfully chosen can not only be more appreciated, but also remembered for longer.
The service sector took a battering in lockdown and is now opening up, and COVID fallout has disrupted supply lines. We are being warned many goods may not be available or delivered in time for Christmas. Not being certain that the gifts you’ve chosen will arrive on time will only add extra stress to this time of year.
Instead, gift cards make it easier to stick to a budget that offers certainty, but make sure they get used before any expiry.
4. More frugal festivities
Many prices are jacked up for Christmas, and people seem more willing to pay a premium on prices for their gifts. If you can shop wisely ahead, you will save money and the stress of being in a rush and in a crowd. Some bargains and sales pop up before 25 Dec, so be prepared to take advantage. The bargains offered on Black Friday and Cyber Monday at the end of this month are one opportunity to shop for less.
You can enjoy making your Christmas feast at home (homemade brandy butter is a favourite of mine). Homemade not only tastes better, but also costs far less. I bought my turkey in October at half-price and froze it, and no one will know the difference. Small wins perhaps, but satisfying nonetheless.
5. Take home message in a Christmas stocking
Don’t be too seduced by the consumerism of Christmas. More Christmas spending does not mean a classier celebration. Don’t stint on the things you really enjoy, i.e. some decent sparkling shiraz, but tread warily, buying up those things no one really cares about.
Do some planning and budgeting. Tolerate debt so long as it’s manageable and clearable in weeks as opposed to months.
Above all, focus on what’s important to you and your family and the world in general. Then don’t forget to have a very merry Christmas.