Money and Life
(Financial Planning Association of Australia)
After a year like no other, many of us are looking forward to a relaxing holiday season shared with family and friends. Check out these easy ways to stretch your Christmas gift budget further, so you can enjoy more family time, without the financial drama.
With positive news about a COVID-19 vaccine on the horizon, many consumers are feeling buoyant heading into the Christmas season.
In fact, consumer sentiment is tracking at a seven-year high, despite 40 per cent of us reporting lost income this year due to COVID-19.
There are mixed reports on how much consumers will spend this year, with some research suggesting business as usual, while others predict we’ll tighten our purse strings.
Traditionally, Aussies are big spenders at Christmas, to the tune of $20 billion on gifts alone! Overspending is commonplace, with many of us failing to plan our spending.
While we all deserve a little Christmas cheer, there’s no point starting the new year with a financial hangover. With that in mind, here are some budget-friendly gift ideas to help you celebrate – without breaking the budget.
1. Set a spending limit
Deciding on a spending limit from the outset will help you stay on track. Plan how much you’d like to spend on each person and keep it reasonable. There’s no harm being open about your budget with family and friends either. This will help to set expectations and avoid any unnecessary anxiety.
Keep in mind as well that everyone has differences in their income, financial commitments and number of people to buy for. So it’s not necessarily a case of setting the same spending limit for everyone.
When you’re planning your budget, spend only what you have available – don’t be tempted to put things on credit. Now more than ever is a good time to spend within your means.
2. Secret Santa
A Secret Santa or Kris Kringle approach to buying gifts can be the ideal way to inject some fun into your celebrations, without blowing the budget. This works especially well for larger groups, friends and colleagues. Just agree a set amount for everyone to spend and make sure no-one gets left off the list!
3. Be kid-wise
Another approach larger families often take is to limit gift-giving to kids only. After all, they’re usually the ones who lack the spending power to buy what they want and get extra excited about the chance to receive gifts as a result.
Managing kids’ expectations at Christmas is also an important way to stop spending getting out of hand. If everyone gets used to seeing a huge pile of presents under the tree year after year, it can get stressful and expensive to keep making this happen.
Younger kids often won’t care about how much their gift costs as long as it’s something they’re excited to receive. And if older kids have let go of the idea of Santa, you can choose to be completely honest with them about your budget. They may get more excited by being involved in deciding what to spend it on from their current wish list.
Although some might write them off as a gift that hasn’t taken thought and effort to choose, gift vouchers can be the very best way to make sure friends and family get the gift they want. Spending money that’s been given rather than earned allows people freedom to treat themselves and it’s the ideal way to avoid giving something that’s not welcome or useful.
5. Give time
Another welcome gift could be one that offers help with something you know a friend or family member struggles to get around to. Whether it’s babysitting, a DIY project or stocking the freezer with enough meals to last a week, the promise of your time and energy can often deliver a more valuable gift without costing you a single dollar. This might be especially welcome by frazzled parents who’ve coped with a year of home schooling on top of working from home!
Buying gifts second-hand from Gumtree, eBay or your local Facebook marketplace can be better for your wallet and the planet too. Not only does it save you money, it could also give a new home to something that would otherwise end up in landfill. It’s also worth doing an inventory of your own possessions for possible re-gifting treasures. There may be some unwanted or unused gifts from birthdays and Christmases past that could be a far better match for someone else you know.
7. Forego the gifts
The holidays are already feeling sweeter than ever for many people this year, after being separated from family and loved ones for so long. It’s completely understandable if you’d prefer to focus on spending quality time together, rather than stressing about getting the Christmas shopping done. Discuss how you feel with those closest to you and let them know you’ll be prioritising time together over physical gifts. It could help you start the new year in a better financial position than ever.
Feeling worried about Christmas and money? Speak to a CERTIFIED FINANCIAL PLANNER® professional and get help to reach your financial goals sooner.