This week I caught up with a friend of mine, Alicia, for her son’s 3rd birthday party. Alicia is 28, her husband Darren is 26 and they have two children aged 3 years and 14 months.
Alicia’s husband has been on workers’ compensation after an injury at work, and she has just stopped working, as he could no longer care for their two children with his injury.
They have a mortgage over their home, and have been able to make their repayments based on the one wage (at a lower salary rate while on compensation) and ‘survive’ week to week without the extra little luxuries.
When we caught up for the birthday party I was seated at the table with four generations of her family. Her grandmother, mother, Alicia and her sons.
Although I have been managing people’s finances for years I was really shocked when I discovered that the three older generations seated at the same table ALL had the same money issues, and were all going to be purchasing their Christmas presents on credit (either borrowed money from others, advanced pays or the good old credit card).
I know that sometimes unexpected expenses pop up but I’m pretty sure that Christmas has been at the same time every year since Granny at the table was young. Surely by the time you turn 76 you would KNOW that it is coming and perhaps you could plan in advance.
After seeing this all unravel in front of me, and hearing them worried about ‘how will we pay it off after Christmas’ I thought it might be a good idea to give you my top 5 Christmas spending tips:
- Buy what you can afford. I know this sounds like common sense, but it can be hard. I know there is nothing worse than someone buying you a $100 gift and then you hand over your $5 gift! There can be ways to avoid the embarrassment. Send out a text message to people who will be buying you a gift and tell them in advance that you are on a price limit or have that awkward conversation in person. You will probably find that they are in the same boat and are grateful for the honest chat and savings in their wallet.
- Buy in advance. I know this tip might be a little late considering it is already December, but try to buy presents over a few pay periods. This will help you avoid one massive spending spree.
- Buy with CASH or EFTPOS Debit Cards only. You don’t want to be still paying for your Christmas presents in July next year. Use cash and if you can’t afford it, look for something else.
- Make a list of who you need to buy for and set a dollar limit before you start.
- Lastly, open a Christmas savings account for next year, so by the time Christmas comes around you already have some savings going forward.
Wishing you all a wonderful Christmas,
Until next time