The silly season is almost upon us and it’s a time when many of us start to get anxious about the amount of organising we need to do before the holidays and the not-insignificant matter of how we are going to pay for everything. enable.ne Financial Adviser, Katie Wesney provides a few of her top tips for surviving the festive season with your finances unscathed.
New Zealanders spend about $6billion during December alone – that’s a whole lot of coin going out the door, and can lead to a lot of pain come January and beyond.
Gift-giving is one of the most common non-negotiables for our female clients, this is spending that helps us feel happy and without it we feel deprived and stressed. Money worries are the leading cause of insomnia in females – and understandably, it often peaks around this time.
For men, their non-negotiables (which are seldom gifts!) tend to focus on socialising, hobbies or alcohol – and all of these expenses also tend to peak around Christmas!
For those who are self-employed, December and January can also coincide with lower cash-flow in your business, which can make things trickier and make you feel considerably poorer.
That’s why moderation, planning and being money-smart is key!
Here are my top 12 tips for making the most of your limited finances over this cash-intensive time:
Set a budget for the upcoming months, factoring in presents, special food, entertainment, travel, holidays etc, along with your normal everyday payments. If there is a deficit, you need to think of ways to make some cutbacks.
Make a list of everyone you need to buy for and put a dollar limit by each present. Take the list with you when you shop and try and stick to it. My clients go into Christmas knowing exactly what they have budgeted for the season. It gives them clarity and they make it work. You’d be surprised by how many people fail to do this!
Cash is powerful – use it and you’ll spend less. It places a natural and visible limit on how much you have to spend.
Try to avoid credit cards, store cards and AfterPay type schemes. Even if you can afford to pay it back in January, it’s likely you’ll spend more than you wanted to and lose track of where you are at with your finances. If you can’t pay it back in full, ask yourself:
“Do you really want to be paying the price of the gift plus 20% or more in interest or late fees on top of this?” The answer should be “no”.
Start early. Don’t be that person running madly around the mall on Christmas Eve panic-buying. The earlier you start, the more likely you’ll be able find a special present AND a bargain. Special and thoughtful does not have to equate to expensive!
Organise your overseas gifts even earlier! I know how much the express fees sting – you often end up paying more than the gift in postage, so check out NZ Post’s deadlines. Consider buying gift cards rather than bulkier presents or try buying online in their country.
TradeMe is your friend. One of my clients had a spring clean and sold unwanted toys/bikes/kids’ clothes and made $2,000 – a nice cash injection pre-Christmas. You might even pick up some bargains for your own gift giving – it’s amazing how many people sell brand new gifts on TradeMe, for half the price
Redeem your vouchers before you lose them, or they expire. An estimated 25% of all vouchers aren’t used before they expire. So dig them out of your wallet and put them to good use on items you need. Also check your frequent flyer and loyalty points â€” this is the time of year to use them instead of cash.
Make your own gifts and decorations. I’ve lost many hours to Pinterest, which has a visual feast of Christmas ideas. Get the kids involved. Get out into the garden and do some planting in pots – herbs and flowers make beautiful gifts. Kids also love baking and crafting, and it keeps them busy. Win-win!
Avoid spending to save. We do a weird thing when we see a sale tag. We focus on what we are saving and not on what we are spending. Let’s be clear, you never save money by spending it! Only buy something if you need it!
Many families have an agreed limit on how much to spend or who they are buying for, like, only buying for the kids, or doing a Secret Santa. Start negotiating your limits with the family now. You’ll find pretty much everyone is in the same boat and relieved to have boundaries!
Potluck Christmas is the way forward! Bringing a plate shares the load, everyone is happy they are contributing, and no one is overloaded.
Katie Wesney is an Financial Adviser, Strategic Coach and Director of enable.me – Takapuna.