Avoid spending most of next year paying off this year's Christmas spend.
Greg Bell, founder of ihatebudgets, shares some simple tips to help manage this year's Christmas becoming next year's nightmare.
Have a plan of action
Set a limit on how much you plan to spend. Once you know how much you want to spend, make a list of who is to receive gifts and how much to spend on each person. Estimate the cost of food and decorations.
As early as possible, set up a saving account and set saving goals. For example, work out how much you'll need to put aside each pay period to have $1,000 by Christmas. "Having a budget in place will help you manage the process much better," says Greg.
Have a credit card strategy
If you have to shop with a credit card, set a limit to the amount that you will spend on your credit card. Include in your budget a plan to repay the amount spent over Christmas, paying as much as possible before getting charged interest.
Use only one card so that your purchases aren't spread over different cards and so that there is a clear record of how much was spent.
Communicate about gifts
Instead of wasting money on unwanted gifts, ask friends and family to suggest three or four possible gifts.
Also, chipping in on a group present can minimise cost while increasing value.
Manage children's expectations
Ask children to suggest three or four possible gifts and teach them to prioritise. Let kids know the price limit to their gift choices. If children are old enough to understand, parents should not be afraid to talk about any financial constraints.
"Helping kids draw up a simple budget using ihatebudget's free kid's budgeting software will help parents communicate to children about money and enables kids to have a realistic view of Christmas" says Greg. "It will make more appreciative of what they receive."
As well as keeping kids occupied, hand-made cards and decorations add to the spirit of Christmas.
If craft is not your style, don't forget the power of photographs. And if you are game, take silly shots - 'tis the season after all.
If you can cook, why not share the love with some home-made gastronomic delights? "Many people fall into the trap of thinking that the economic value of the gift equates to its sentimental value. Gifts should only be a token to illustrate love and affection," says Greg.
Start shopping as early as possible
Shopping early allows you to have time to compare prices, take advantage of sales and avoid rushing to get gifts. For the highly organised, buy presents throughout the year. Look out for sales on alcohol and stock up early.
Lateral gift giving
If you are stuck for gift ideas, giving to a worthwhile cause truly expresses the spirit of Christmas. Many organisations will issue some form of acknowledgement for the amount given that can be presented to the recipient. Another clever gift idea is investment certificates, particularly for children to teach them about money.
"Let common sense rule this Christmas. You will not only have a merry Christmas, but a lot more enjoyable new year as well," says Greg.
More tips for Christmas:
- When planning a party, buy food in bulk from markets or bulk buying stores.
- Having a shopping list minimises unnecessary impulse purchases.
- Set aside money for shopping and impulse-buying.
- Don't forget your regular expenses and factor them into your budget.
- Small credit card payments are better than none.
- Look for sales throughout the year.
- Shop with cash where possible.
- Use a debit card as it doesn't charge interest but takes the money directly from your saving accounts.
To find out more about ihatebudgets or the free kid's budgeting software, visit ihatebudgets here