The count down to Christmas is one of the great times of the year, where family and friends come together to exchange presents and enjoy a big feast. However, as a result of this Christmas time is the largest period of time where people incur debt. Unless you create and abide by a budget it can be extremely difficult to purchase all of the food, presents, and other Christmas goodies without swiping the credit card; high interest rates can be devastating in the months to follow. With a little motivation and planning you can possibly start the New Year with no debts to pay.

Make a list of the people who you will be buying presents for and figure out the maximum amount you want to spend on each. Add up all of the amounts of planned spending for the people on your list as well as extra money for food and other expenses, this figure will then become your budget.  If you feel that the total is too much to spend, adjust your budget accordingly. Try to keep the budget amount equal to, or less than the amount that is available in your savings account to avoid going into debt. Also, try to avoid taking your credit card with you when you go shopping, as it will give you the temptation to spend over your budget. Stay within your set amount, even if you see a bargain that is over the budget. Some strategies for sticking to your budget and reducing debt this festive season include:

Get organised and shop early

Start shopping now! By buying just a few presents each week and spreading out the cost during the lead up to Christmas it will take the pressure off you later in December. Reduce Christmas Eve panic and stress by avoiding last minute shopping. This will likely be more expensive since you will be in a hurry and prone to purchase the first thing you find. Hopefully by allowing yourself time, you will be able to find the best gifts and hunt for the best bargains.

Also start thinking about food, especially if you are hosting the Christmas Day festivities at your house. Have a list of all the food you need, as mentioned above you should avoid buying everything in one shop. Buy food that will keep in your pantry until Christmas, as a part of your usual weekly shops (e.g. puddings, frozen foods, chips.) The last thing you want is to break the budget and go into debt the night before Christmas.

Cheaper alternatives to turkey and ham feasts are barbeques or picnics. Also encourage your visitors to bring food with them. One couple or family may be in charge of salads, another responsible for desserts and you could purchase the meats. This breaks up the expenses for everybody and will make for a more easily organised Christmas feat.

Smart Christmas gift ideas

Buying Christmas gifts for even a small extended family can add up to be quite expensive. Ways to counteract this and reduce financial strain on the entire family, friendship group or work colleagues is to introduce a ‘Secret Santa’ or ‘Kris Kringle.’ This involves each person buying only one gift for one other person. This can be organised by placing everyone’s names into a hat and each person drawing a name at random. Set a price limit for everyone to spend, even if it is a hundred dollars it will still work out much cheaper than buying small gifts for everyone, and this way each person will receive one really nice gift.

The spirit of Christmas is about loving and giving; not spending and getting. For this reason it is important to remember that gifts from the heart count more and presents don’t always have to cost you a fortune. Home-made presents are a good way to save money, some ideas include:

•   Making homemade cards
•   Framing a meaningful photo or the kid’s artworks
•   Buy plain paper and get the kids or yourself to decorate it
•   Put together a scrapbook of memories to celebrate a year together with a loved one
•   Recycle old cards or gift wrap to make gift tags or Christmas collages

Bear in mind that your time spent on making a present shows your love and appreciation more effectively than an expensive, material gift. After all that is what the spirit of Christmas is all about.

Preparing a budget is simple, compared to the task of sticking to it! Unexpected expenses can always arise and foil the best laid plans. Be prepared for these expenses and get organised by planning and starting your Christmas shopping now, in order to reduce the possibility of this Christmas being full of debt and stresses rather than the joy and merriness it is supposed to bring. Here at The Quinn Group our experienced team of accountants and financial planners can assist you with any of your budget, debt related or accounting needs. For more information submit an online enquiry or call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.