Unemployment is high this year, and savings accounts are low. But that won’t stop Australians from making their Christmas shopping lists and filling their shopping carts with gifts this holiday season. Shopping has become a firmly entrenched holiday tradition, and the average Australian will spend an average of $815 this season–even if they can’t afford it.
Before you head out to your local mall this holiday season, give yourself a big gift: restraint and discipline.
The reason so many people fail to restrain from overspending is the intense social pressure to go out and spend at this time of year. Plus the many ways people justify overspending. And with Christmas in just a few days, it’s too late to reel in your spending over a longer time period. But you can still do some effective short-term planning. Think about all the areas of your festive spending, from the presents, to food, the festive decorations, cards, postage, parties and entertainment.
However, when the calendar turns to January, the negative effects of this spending will start to set in. This can include higher than expected credit card statements, tighter finances, increased stress over payments and the regret over the amount of money spent.
Below are tips on how not to overspend this holiday season and avoid the hassles at the start of the year.
Spend Only What You Have Saved
37% of people will borrow money to see them through during the holidays. Now, instead of using your credit line, check your bank balance and work out how much you have to spend. Add to this any money you’ve saved for the purpose during the year. From there, you can start to budget for the season.
You Need to Set a Budget
Before the holiday shopping starts, you need to decide how much money you want to spend. Think through all the different aspects of holiday shopping. This includes:
- Travel expenses
Divide your budget into the categories mentioned. And ask yourself questions like how much do you desire to spend on gifts? Or how much will the travel cost? Or how many special events are on your calendar? If the numbers are not lining up, what are the changes that you’re willing to make?
Have a Shopping Plan
Instead of wandering around clueless on what to buy, work out how you want to spend your allocated budget and what to buy each person. Otherwise, it would be very hard not to be tempted by some of the wonderful items on display. Buy the things that are on your list and you need to keep all your receipts in a safe place. This way, if you’ve made an impulse purchase, you can return the item and get your money back.
Be Aware of Retail Tricks
Retail stores are good at enticing people to buy. Retail credit, loyalty cards, constant sales, incentives to return to the store and decoy pricing are all tricks that retail outlets use in enticing customers to make purchases. Be aware of them, especially during this season.
Self-gifting is not a bad idea, especially if you’ve worked hard for the whole year. Nearly 60% of people are self-gifting these days. On average, a person may spend $150 or more buying gifts for themselves. Just limit yourself to one ultimate item that you really want with enough money to save.
Limit Using Your Credit Card
Credit cards are considerably more expensive than your Christmas cards. Say, a person spends an average of $384 on presents this year. If you put that amount on a 15.9% credit card and opt to just repay the minimum each month, it will take that person 11 Christmases to pay off the debt.
Establish Your Expectations Early
If you’re thinking of cutting down on the number of Christmas gifts you’ll give away, you need to establish that expectation. Also, if you intend to make a new gift-giving approach to your extended family, it will be nice to inform these people about your early decision and why you decided to make it.
Don’t Get Carried Away with Online Shopping
Internet shopping is really convenient and will surely spare you from the high street stampede, it comes with its own set of dangers. Shopping online will make you feel like you’re not spending cash. Reality will set in when you see the list of your payables on your bank account. Also, you have to make sure you are not caught by the added cost of tax, packing and delivery.
Track Your Spending
One essential component to a wise financial standing is to track your spending on a daily basis because you will be able to avoid overspending during the holiday season. If you have already set your budget thoughtfully, it is important to stay within your set goals.
Avoiding spending too much during the holiday season is not easy. It will require extra control, time and effort.
Share your tips for spending during the holiday season!