Do we need to put ourselves under so much pressure to overspend at Christmas? The truth is that you can have a great Christmas and still leave money in the bank. Here’s how:
Prepare a Christmas Budget
Before you begin any Christmas shopping, prepare a Christmas budget. How much are you able to spend this year on Christmas and all its trappings: gifts, decorations, extra food and drink, clothes, entertainment, phone calls, charity, and travel? If this total is more than your budget, simply cut back. A budget is only as good as your ability to stick to it.
Shop With a List
Make a list of friends and family for whom you wish to purchase gifts and allocate an amount for each person. Remember those who have been particularly helpful throughout the year and include a few extra gifts for unexpected guests. Sometimes you receive a gift from someone not on your list and feel obliged to reciprocate. You will have to drop some people from your list – don’t worry, they are probably dropping you too.
Avoid Borrowing to Fund Christmas
How much can you afford to spend without going into debt? It is usually better to pay with cash for experiences or gifts, rather than to borrow as the interest cost will only make everything much more expensive, particularly if you use your credit card. Many families will still be paying for their Christmas overindulgence well into 2021 at a time when school fees are due. Don’t let that be you.
Buy in bulk and share
Food is a major Christmas expense. In the run-up to Christmas, we tend to buy far too much food and so much of it will end up in the dustbin, wasted. Plan your Christmas food requirements now and make a list of all that you will need. Consider bulk buying some items that can be shared with friends, family, and total strangers who will otherwise face an abysmal Christmas. You can share the cost of a cow, a turkey, a sack of rice, and other Christmas staples.
Split the cost
If you are expecting the extended family over this Christmas, which could be more than a few, split the cost so that one person buys and prepares the starters, one does the main meal, and another the desserts. The joint effort will save you money and you can still enjoy family bonding time.
Are you hosting a big family Christmas with your extended family? We would love to be able to buy gifts for all our friends and relations but this is unrealistic. The reality is that funds are limited and the extended family and friends can be unlimited. Try a “Secret Santa” approach which allows everyone to buy just one present. Set a maximum price limit for gifts so that the richer relatives don’t make the less fortunate relations feel bad. This is so much fun as it saves so much cash and leaves everyone excited and guessing as they open their gifts.
Give your Children the Gift of a Mutual Fund
Presents that improve personal finances are an ideal gift at Christmas, not only do they outlast expensive toys and hi-tech gadgets, but they may continue to give, long after the wrapping paper has been thrown away. The gift of stock or a mutual fund investment is a thoughtful financial gift to a young child and could be the start of a rewarding long-term savings plan. You can invest with as little as N5,000.
Encourage your Children to use Their Creative Talents
Encourage your children to present handmade gifts to loved ones who will treasure them. Often personalized gifts or those of great sentimental value such as framed photographs, painted pictures from school art class nicely framed, recordings of a grandchild’s songs, a piece of poetry, some specially baked cakes and bakes, or a specially grown potted plant, do not cost a fortune and will be much appreciated. This is also a way of teaching children valuable lessons that it is not all about money, thoughtfulness is far more important.
Make your Own Christmas Hampers
Home-made Christmas hampers for friends and family make great gifts. Buy the contents in bulk and divide them up among the hampers. Decorating and filling up the hampers will provide much fun for your children as well as provide valuable lessons.
Are you Getting a Christmas Bonus?
If you are fortunate enough to receive a Christmas bonus, try not to spend it all. By spending it all, you could be forfeiting a great opportunity to build your savings. Use at least a part of it to pay off or reduce your high-interest debt, add some cash to your emergency funds, or invest part of it.
Build Giving into your Financial Plan
Dig up all those gifts you never used and clothes that are in perfect condition but that you do not wear. Plan to give things away. You will be surprised by how many people will be so happy for things that you no longer have any use for.
It’s important to remember that even though the recession may have affected your family finances badly, there are so many people far worse off than you. Giving doesn’t always have to be about money. You can give of your time, talent, or expertise. Involve your children – this will teach them powerful lessons that they can have a positive effect on the wellbeing of others.
Don’t forget the reason for the season. In all the festivity, it is so easy to forget the essence of Christmas.
Photo by Any Lane from Pexels