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How to avoid a financial hangover this Christmas

Christmas is an exciting time of the year, the new year is just around the corner, there are lots of social occasions, gift giving and parties. However, there is also a serious side to the festive season, it’s very easy to overspend and overindulge and end up paying for it well into the new year.
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How to avoid a financial hangover this Christmas

Christmas is an exciting time of the year, the new year is just around the corner, there are lots of social occasions, gift giving and parties. However, there is also a serious side to the festive season, it’s very easy to overspend and overindulge and end up paying for it well into the new year.
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Statistics show that 43% of Australians use credit cards to fund Christmas present purchases and many have problems paying back that debt after Christmas is over. We want to ensure our clients get through the festive season without a financial hangover, so we have put together 8 tips to make sure you start 2018 on the right financial foot.


Tip #1 – Plan your Christmas shopping

Always write a list! Never just hit the shops, always write a list of who you want to buy for, an idea of what you want to buy and how much you want to spend. This avoids wandering aimlessly around the shops spending money for the sake of spending money and losing track of how much you spend.

By planning and having an idea what you want to buy this also means you can do some internet research to see what shops have the best sales or if you could buy the gift online cheaper and save some money.

Research shows that people spend on average $1000 on Christmas presents each year and end up with a credit card debt of $1700 after the silly season ends, so it is important to plan and make sure you know how much you can afford to spend and who you will be buying for. There is no point budgeting to spend $1000 if you can only afford $600 on gifts.

Tip #2 – Establish some ground rules

This is a really important tip. Too many people get caught up gift giving. It’s nice to give and receive gifts, but it’s helpful to have ground rules. Have the conversation up front with family and friends to make sure everyone is on the same page. Agree on spending limits and who you will and won’t be buying for, this avoids offending anyone or any awkward moments at the Christmas table.

If you are meeting with your family for Christmas maybe make it just about the kids and only give kids gifts or if you do want to exchange presents between the adults, make it a Kris Kringle situation where a limit is set, and each adult receives one gift.

Another great idea when it comes buying presents for the kids is to give family members tips on what to buy so they are getting things they want or need, for example; school supplies, clothes, shoes or stationary.

Tip #3 – Focus on personal value rather than dollar value

All too often people get caught up in spending money on gifts at Christmas instead focus on experiences and homemade gifts rather than the amount of money being spent. As the age old saying goes, it’s the thought that counts.

Save money by hand making personalised gifts. Be creative, make your own cards and wrapping or better still, use your kid’s artwork or photos and turn them into cards and wrapping. Another great idea is to create DIY Vouchers for services you can offer such as give vouchers for babysitting or a home-made dinner.

Tip #4 – Avoid the financial hangover of festive season events

Festive season events can cause more than one hangover. They can really hurt the finances as they are not usually factored in when budgeting for Christmas and the costs can add up quickly; Tickets to events, food & drinks, transport, new outfits…the list goes on and on.

If you are planning on being social think about the event before you go. How are you going to get home? By planning in advance, you can save money on expensive unplanned cab rides home at the end of the night.

If your budget is a bit tight, be selective, choose the events you can afford to go to. You don’t have to go to everything, it is okay to say no to some things. Instead of buying a new outfit, get a dress altered, share outfits with friends. You don’t need a new outfit for every occasion.

Finally, if you are hosting an event don’t be afraid to ask people to bring something to share. Most people are more than happy to help and will often bring something even when they are told not to, so you might as well get them to bring something needed and save you some money.

Tip #5 – Make room for the new by getting rid of the old

If you have children they are going to get a lot of gifts for Christmas, even if you don’t plan on it, so it could be a good idea to speak to the kids beforehand and find out what they have that they don’t play with anymore or clothes that don’t fit. Get the kids involved in the process.

Once you have worked out what you need to get rid of you could have a garage sale or sell on Gumtree. Or better still donate them to a charity.

If money is tight, it could help you out financially to sell some items. Even adults tend to end up with gifts or toys that don’t get used and end up collecting dust, like treadmills and boxing bags. So, have a pre-Christmas tidy up and you could be surprised how much more space and money you have.

Tip #6 – Taking advantage of post Xmas sales

Post-Christmas sales can be a great opportunity to get a bargain, but they can also be a good opportunity to get sucked in and enhance the post-Christmas hangover. It’s important to go into the sales with a plan just like Tip #1. Have a list of what you need so that when you go to the sales you go looking for specific things.

Another really important point, if you are planning on hitting the sales don’t spend all your money before Christmas. If you hit the sales with your credit card and you then can’t pay it off before you start paying interest, you will end up paying more than full price for the items you buy.

Post-Christmas sales can also be a great way to get started on your Christmas presents for next year. By Pre-buying gifts in the sales or over the course of the year, you can not only save money on the purchases, but it can help spread the burden rather than buying everything in one month of the year. Sales are also a great time to buy wrapping paper and Christmas cards at heavily reduced prices that you can put away ready for next year.

Tip #7 – Survive school holidays with budget-friendly activities

This goes a little past Christmas but is still part of the silly season. Kids are about to start school holidays and it’s important to budget for entertaining the kids over the holiday period.

There are so many free or low-cost activities for kids around Adelaide. Grab your local messenger or join Facebook groups and you will be surprised to learn how many local free events there are during the school holidays. There are also free options like playdates or social catch-ups at the park.

Some more expensive options also offer cheaper last-minute tickets to events. Sometimes its worth keeping an eye on things and if you are not desperate to go and see if you cannot get discounted tickets.

Planning is so crucial. If you plan the money you have available for the period of time it needs to last, you are less likely to feel the strain of not having enough money.

Tip #8 – Plan for 2018 & next Xmas

Planning for 2018 and next Christmas is very important. Don’t be afraid to talk to your family early about the plan for next year and get the ball rolling straight away so you can be prepared well in advance. Plan birthday and Christmas presents so you can buy in the sales and get them discounted.

If you have found Christmas a bit of a struggle financially this year, it is a good idea to start saving early for next year. Put things on layby and pay them off gradually rather than using your credit card. A concerning statistic is that 18% of Australians struggle to pay off their credit card debt by the following Christmas. This can become a domino effect and become difficult to get on top of it.

The most important thing to take away from all our tips is to PLAN. Planning plays an important part in being in control of your finances and aware of what you can afford and how much you are spending.

The team at Rise High Financial Solutions hope you make the most of the festive season and what it has to offer and hopefully with our helpful tips start the new year without a financial hangover.

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