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How to celebrate Christmas on a budget

Christmas is an expensive time of year. Between gifts, decorations, parties, food, travel and other costs, your budget can take a real beating.

According to MoneySmart, Australians plan to spend an average of $955 over the holiday season, but end up with an average post-Christmas credit card debt of $1666 – with most of us spending well over $500 on Christmas gifts alone.[i]

If you’re one those people who has trouble coping with the financial stresses of Christmas, don’t worry – there’s plenty you can do to make your dollars go further. Here are 10 of the most expensive things about Christmas, and how to save money on each of them:


1. Gifts for adults

The trick here is to go for thoughtful and personal rather than expensive and mindless. Nobody likes receiving those ‘obvious last minute/didn’t have a clue’ gifts: the salad spinner, the foot soaker, the nail clipper set or the whiz-bang cheese slicer that gets put in a drawer and never used. Think hard about the recipient’s interests and personality and make the gift match the person.

Set a strict dollar limit on how much you’ll spend on each gift recipient. Just as importantly, cut down on how many people you buy presents for this year. Most of us could easily chop both our gift recipient list and our number of presents per person in half without offending anyone or having any less of a Christmas.

Shopping online can often get you a better deal (and make it easier to track down a hard-to-get item), but make sure you order what you need well ahead of time to allow for delays in delivery.

 

2. Gifts for children

Celebrating Christmas on a budget

The best gifts for kids are those that challenge their imaginations and allow for open-ended play

Parents need to resist the pressure to get their kids this year’s ‘must-have’ expensive gift – usually some elaborate toy or high-end electronic gizmo.

The best gifts for kids are those that challenge their imaginations and allow for open-ended play: books, painting sets, Lego, drawing supplies, outdoor sporting gear, blocks, etc. When gifts can be used by a child in several different ways, they’ll get more use over time.

 

3. Gifts for workmates

In office environments, it’s easy for Christmas gift exchanging to get out of hand. If you’re giving gifts to over a dozen co-workers, it gets expensive. Christmas should be about family, not the Operations Manager and the Sales Rep. If you feel you must give gifts to people at work, keep individual gifts under $20.

 

4. Food

Australians spend huge amounts of money on groceries during the Christmas period: the Australian National Retailers Association estimates that more than $30 billion is spent each year in the four weeks leading up to Christmas.

One of the cheapest ways to trim your Christmas food budget is to go out for a Christmas buffet instead of cooking it all yourself.

Take a hard look at your Christmas menu and simplify it. Avoid expensive seafood (or buy frozen instead of fresh). Have a casual barbecue instead of an elaborate dinner. Substitute turkey with chicken, or use turkey pieces instead of a whole bird.

When you go to the supermarket, shop from a list and bring a calculator to add up purchases as you go so you don’t exceed your budget. Bring your budget amount in cash instead of paying by card. Buy deli meats in bulk and slice them yourself.

Make foods from scratch rather than buying a lot of pre-packaged items which will cost more. Ditch the bowls of junk food and replace them with fruit platters. There’s often a lot of waste associated with Christmas dinner, so be careful with quantities and make good use of leftovers on Boxing Day.[ii]

One of the cheapest ways to trim your Christmas food budget is to go out for a Christmas buffet instead of cooking it all yourself. Even the priciest buffet lunch is going to work out cheaper than buying all the necessities to prepare your own feast.

One of the cheapest ways to trim your Christmas food budget is to go out for a Christmas buffet instead of cooking it all yourself. Even the priciest buffet lunch is going to work out cheaper than buying all the necessities to prepare your own feast. You’ll be left with a lot more free time to enjoy the day, too.

 

5. Alcohol

Australia’s alcohol consumption triples over the Christmas period.[iii] Even people who don’t drink much at other times of year get into the ‘season to be jolly’ spirit over Christmas and New Year. Alcohol is one area where many of us could easily save hundreds of dollars each year simply by cutting down on all the alcohol we serve at home.

We could also limit the number of times we buy booze as a Christmas gift. Don’t feel obligated to bring a bottle or carton to every social gathering you attend, either.

Australia’s alcohol consumption triples over the Christmas period.

Though it may sound like too drastic an idea to contemplate in our alcohol-obsessed society, consider having a completely alcohol-free Christmas this year. It’s not as hard as it sounds – it just takes self control and a commitment to putting your health and finances ahead of alcohol-induced frivolity.

If that radical plan doesn’t work for you, there are several ways to reduce your Christmas alcohol spending. Buy in bulk ahead of time. Join a wine club and take advantage of their discounts. Check whether purchasing online or direct from the winery works out cheaper. Buy clean-skin wines. Avoid expensive liqueurs and spirits.

 

6. Parties

Christmas Food

Christmas parties come in many forms – and you don’t even have to be the host to spend a ton of cash on them. If you’re expected to contribute booze (or pay for shouts during the night), help out with food or bring a gift (or several), the costs can certainly add up.

If you’re organising the party, plan your feast around what’s already in your cupboard instead of buying everything new. Buy seasonal produce, visit the deli for meats and cheeses on special and avoid packaged foods as much as possible. A delicious trifle made with summer fruits is always a popular dessert option – and it can be made as big or as small as you like.

 

7. Plane travel

If you’re heading out of town or overseas during the Christmas break, you may be faced with high-season airline prices. There’s not much you can do about that, except make sure you organise your reservations at least two months in advance.

Leaving flights to the last minute not only means you’ll pay a lot more; you may also miss out on a seat altogether.

Leaving flights to the last minute not only means you’ll pay a lot more; you may also miss out on a seat altogether. Flights to Bali, New Zealand and other popular destinations fill up quickly in the lead-up to Christmas.

 

8. Decorations

The cheapest time to shop for Christmas decorations is immediately following the previous year’s Christmas. It’s easy to make your own decorations too (or get your kids to make some – they always love contributing in this way).

Explore the option of buying your decorations online – in some cases, you’ll get free shipping if you buy over a certain amount. Set a limit on how much you’ll spend on decorations – and stick to it. Individual decorations aren’t that expensive – it’s the sheer volume that drains the wallet.

 

9. Christmas cards

Christmas cards are a funny tradition in which we somehow feel obliged to send out dozens of messages to people we often choose to ignore much of the rest of the year. Whether Christmas cards come in physical or digital form, are they a thoughtful gesture – or meaningless spam?

The problem with sending digital cards is that they’re often not even opened and looked at by recipients, who consider them a token gesture at best. In the end, ask yourself if a posted Christmas card is as meaningful as a long email that talks about what your family has been up to this year – that at least requires some thought and effort.

 

10. Boxing Day sales

Are Boxing Day sales a bargain or just a trap for unwary spenders? For a day that’s meant to be all about savings, we sure end up spending a lot – close to $3 billion within that 24-hour sale period, according to the National Retail Association.[iv] But the best way to ‘save’ on Boxing Day is by ignoring the shops and doing something else with your day.

 

Key takeaways:

  • Christmas should be a time of joy, not financial stress; there are many ways to reduce your spending and stay clear of debt this holiday season
  • The ideal Christmas gift is thoughtful, personal and affordable; give gifts because you want to – not out of a sense of obligation
  • Consider having an alcohol-free Christmas – it’s better for both your health and your bank balance
  • Taking your family out to a Christmas buffet instead of shopping and cooking yourself takes a lot of the work (and much of the cost) out of Christmas lunch
[i] https://www.moneysmart.gov.au/managing-your-money/budgeting/spending/australias-christmas-spending
[ii] http://www.heraldsun.com.au/news/victoria/saving-on-christmas-food-how-to-keep-your-festive-costs-down/news-story/e3bc1201fc9111fa105cea2abd4385b7
[iii] http://www.sbs.com.au/news/article/2009/12/28/alcohol-intake-triples-over-christmas
[iv] http://www.abc.net.au/news/2016-12-26/australians-predicted-to-spend-up-to-$2.8b-at-boxing-day-sales/8148002

This post was brought to you by Budget Direct Home Insurance

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