Avoid the Christmas budget blowout

Avoid the Christmas budget blowout

Christmas is a time of giving and with so much pressure to buy up big, it can be difficult to keep household spending from blowing out.

Australians are predicted to spend $52.7 billion this Christmas – an increase of 2.6% from last year –according to the latest annual Christmas retail sales forecasts from Roy Morgan and the Australian Retailers Association (ARA).

This is despite the fact that Australians wasted more than $400 million in unwanted gifts last year according a study commissioned by ING.

If you are retired and already on a tight budget, Christmas can be a particularly stressful time, and really stretch you financially in terms of gift giving and entertaining.

For many there is also the cost of travel to visit children and relatives, many of whom may be in other states or even overseas.

There are some things you can do to keep spending and waste – not to mention stress levels – under control this Christmas.

Determine your budget

Check your bank statements and work out how much you can realistically spend without resorting to credit or buy-now-pay-later arrangements.

Make a list

And just like Santa, check it twice! Work out who you are buying for and what you want to get them. Perhaps consider buying only for the children to cut down costs.

Plan in advance

The earlier you start the easier it will be. This also gives you time to take advantage of pre-Christmas sales, special offers and shopping online.

Set a spending limit

Talk to family and suggest that everyone sets a limit on how much they spend on gifts for each other; or even better…

Introduce a Secret Santa / Kris Kringle

Again, allocate a maximum to be spent. Draw out names so you know who you are buying for and everyone gives and receives one present.

Give the gift of giving

More people are opting to make charitable donations on someone’s behalf instead of gifts. Charities such as The Salvation Army have gift cards starting from as little as $5 and are available online.

Buy gift cards and vouchers

Always welcome, gift cards and vouchers are an easy way to stick to your budget and ensure you only spend the allocated amount per gift and no more.

Share the catering

Ask everyone to contribute to the main celebration meal with something substantial such as a ham or seafood or smaller items such as nibbles, drinks, salads or deserts.

Get savvy with gift wrapping

Take advantage of complimentary in store wrapping where possible. Supermarkets also have very affordable and attractive gift wrap and ribbons.

Be honest

The most important tip this Christmas however is to be honest.

If your budget really is too tight for any extras, then talk to family and loved ones and explain the situation.

They are likely to be very supportive and more interested in enjoying your company than anything else.

Work together to figure out what you can contribute – food preparation and cooking on the day, keeping the kids busy, organising a card game etc.

There are lots more good tips on Christmas spending and budgeting at ASIC’s MoneySmart website.

If financial stress is something that is impacting on your retirement, it might be time to explore your options.

If you’re a retired homeowner, for instance, you may want to consider using some of your home equity to increase your income or refinance existing debts – allowing you to alleviate the pressure and live a little bit better.

For more information, talk to us at Smooth Retirement 1300 510 015.

Smooth Retirement Pty Ltd is an independent service providing expert guidance in equity release and retirement income planning Australia-wide. ABN: 46 619 010 445; AFSL 510015; Australian Credit Licence: 510015; smoothretirement.com.au; info@smoothretirement.com.au; 1300 510 015.

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