Christmas spending squeeze as living costs bite: planning is vital

Christmas in a cost-of-living crisis will be a new experience for many. Here’s how to navigate it financially and emotionally.

Pssst! There’s only 118 days until Christmas. And if you haven’t started saving for the festive season, you may be behind half the Australian population.

New research from Everyday Rewards has found that more than 44 per cent of consumers have started to budget for Christmas, and almost three quarters will use tactics such as searching for special promotions, subscribing to retail email offers and using loyalty cards and programs.

However, 11 per cent say they won’t begin preparations until the final week before Christmas, the study found.

“By starting to plan and save for Christmas now, shoppers can keep an eye out for specials,” Everyday Rewards managing director Hannah Ross says.

She says more than 600,000 people are using the Everyday Rewards Bank for Christmas program, where points earned by shopping at Woolworths, BIG W, BWS and other stores can be saved during the year to spend in December.

“Some of our savviest members have already banked over $2000 to spend over Christmas,” Ross says. Members get at least one point for every dollar spent and can receive $10 off a future shop for every 2000 points collected.

Everyday Rewards managing director Hannah Ross. Picture: Dallas Kilponen/Woolworths

MAKE IT AFFORDABLE

Knowing what you are likely to spend on Christmas is important, and there are many free Christmas budgeting calculators on websites including mybudget.com.au, beyondbank.com.au and keystart.com.au.

MyBudget director Tammy Barton says planning now puts people ready to take advantage of sales events coming soon.

“Remember that the perfect Christmas is perfectly affordable,” she says.

“It helps to be on the same page as a family, as to what is and isn’t realistic.

“Christmas is definitely not a one size fits all situation, in that what may be a reasonable budget for one family may not be the same for another.”

Financial planner Canna Campbell says Christmas often becomes “maniacally busy”.

“So, when we aren’t prepared, many of us end up wasting money and missing out on great buys,” she says.

“Planning and preparation can go a long way in stretching a Christmas budget, not only saving you money but valuable time and energy as well.”

SEPARATE ACCOUNT

Campbell says savvy savers often use a separate dedicated account to add deposits. “Don’t forget to nickname the account Christmas savings, so you don’t get tempted to spend that money,” she says.

Financial planner Canna Campbell says preparation can stretch your Christmas budget.

Many items can be bought well in advance including non-perishable foods, alcohol, decorations and snacks, Campbell says.

“Chatting to the supermarket staff is an under-utilised hack as they hold valuable insights into the level of supplies, price changes and what, when and how particular items are set to go on special,” she says.

“Find out what your family wants to eat at Christmas beforehand rather than making your kitchen table look like a breakfast buffet at a hotel. This will help save money but food wastage too.”

Christmas amid a cost-of-living crunch this year will be a new experience for many families, and MyBudget’s Barton says it’s a good idea to manage expectations.

“Just because a previous Christmas was lavish, doesn’t mean they all have to be,” she says.

“If you’re not in a financial position to repeat history, manage your family’s expectations by having an open and honest conversation.

“Make a Christmas gift list and set a limit. Include everything from Christmas presents to Christmas lunch and catch-ups with friends. Don’t get hoodwinked into impulse shopping for things you don’t need – stick to your gift list like egg to nog.”

MyBudget founder Tammy Barton says have open conversations. Picture: Brenton Edwards

FIVE FESTIVE FINANCE TIPS

• Automate Christmas savings into a dedicated bank account using direct transfers.

• Print recent bank and credit card statements to identify overspending that could be redirected to Christmas.

• Set a budget that does not prioritise presents over household bills. Can a tax refund be put towards it?

• Use retail and credit card loyalty programs to collect points that can be redeemed for gifts or other costs.

• Divide meal costs among planned guests, and establish well in advance who brings what.

Originally published as Christmas spending squeeze as living costs bite: planning is vital