The holiday period is a time in which you may find that your spending increases considerably from what you are usually accustomed to throughout the year.
According to a recent survey, Australians on average spend $955 per person over the holiday period when taking into account:
1. Gifts ($591)
2. Entertaining friends and family at home ($266)
3. And, extra food and drink out of home ($138)*.
Whilst your spending may be higher or lower than this, as you can see, the figures can add up to something quite substantial. As such, we have provided you with several saving tips to help you keep your spending in check over this holiday period.
Gifts
The purchasing of gifts is often one of the largest expenses that you will incur over the holiday period. As such, it’s important to carefully plan by making a list of who you wish to buy a gift for and setting an appropriate and realistic dollar limit for each. Once this is done, consider what each person may like as a gift. This will not only give you an idea as to what to focus on, but also help curb impulse buying and allow you to shop around either online or in store to get the best price.
In addition, if your family is quite large, consider establishing a Secret Santa or exploring other cost-effective options for giving this year, such as a Family Christmas Auction. This is a fun way to breathe life back into some of your possessions that you no longer need or want, such as books, games, toys and tools, by passing them up and down the family tree to those that will appreciate them moving forward.
Lastly, at some stage you have probably seen the gifts received by either your children or those of other family members in previous years – whilst this can be an exciting part of the holiday period for the kids, take some time to consider the following for the kids:
We are not suggesting you change the way that you give, but perhaps consider focusing on gifts that will have a longer lasting meaning by applying the old adages ‘quality not quantity’ and ‘experiences over material possessions’.
Entertaining friends and family at home
Over the holiday period, you may entertain friends and family at your home. This is a great way to save money collectively when comparing the cost of eating out at a café or restaurant; however, if you are not careful, the costs of being a host can add up when considering the amount of food and drink required to accommodate everyone.
To save money, consider asking each guest to bring his or her own drinks and contribute to the food – a specific and collectively agreed upon plate of food (e.g. salad, meat or nibbles) or meal (e.g. entree, main or dessert). In addition to saving you money, this will mean that each person will be able to consume the drinks of their choosing as well as have food that caters to everyone’s tastes and dietary requirements.
Alternatively, if you want to take on the task yourself, make sure that you create a list that is adequate to cater for everyone (whilst limiting potential waste) and is at a cost to you that is within your means. To reduce the cost of purchasing food and drink, it may be worthwhile shopping around at different supermarkets to take advantage of specials as well as considering substituting expensive brand name products for ones that are often just as good quality, but cheaper.
Extra food and drink out of home
Given the nature of the holiday period, there will be times when you will be out and about and need to pay for food and drink that aren’t part of your normal household expenditure. However, if you notice yourself dipping into your pocket on a frequent basis to pay for extra food and drink, it may be time to put the brakes on.
The holidays are a time to relax and enjoy yourself, but if you are not careful you may find yourself quickly eating into your savings or needing to overuse a credit card. Neither of these are great solutions. Instead, consider limiting the amount of times that you eat and drink outside of your home and for the times that you do intend to dine out, set a dollar limit.
In addition, this could also be a great opportunity to practice (or improve upon) your culinary skills in the kitchen without breaking the budget. For example, try replicating your favourite gourmet breakfasts, lunches and dinners at home as this can often be at a fraction of the price of what it would cost you at a café or restaurant. Embrace your inner Master Chef!
Moving forward
The holiday period is invariably a time that we loosen our purse strings and wallets and spend a little more than what we are accustomed to when considering our usual spending habits. With all of the saving tips above, it’s important to first understand your existing financial situation so that you spend within your means. As such, consider creating a realistic holiday budget and then monitor your adherence to it by tracking your spending.
*Commonwealth Bank XMAS Spending Study. (November 2016).