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Budgeting for Christmas: saving for a fun and affordable festive season

Is it too early to talk about saving money for Christmas? Ho, ho, no! It’s never too early to plan for the festive season. Here are 12 Christmas saving tips to put cash in your cracker, snow in your globe, and the best way to avoid a New Year credit card hangover.

Christmas is sneaky, like a ninja 

Christmas happens on the same day every year, yet manages to catch us by surprise. How does that happen? Christmas is like a ninja. One minute it’s tax time and, the next, every shop has fake snow in the window.

If you’re like most people, you have excellent Christmas intentions. Every year you plan to finish your Christmas shopping early and every year you find yourself in a flat panic with only a week to go. 

And if Christmas weren’t stressful enough, Covid has turned up the heat even higher. Global logistics chains are interrupted and stock shortages are everywhere. It all adds up to even more reasons to get your Christmas ducks in a row.  

Will your Christmas be savey or spendy?

As we write this article, the calendar is about to flip over to July.  That means there’s about six months or 24 weeks until Christmas. If you get paid fortnightly, that means Christmas is just 12 pays away.

Given that the average Australian household spends just under $1000 on Christmas—and assuming you haven’t set any Christmas savings aside yet—you would need to save around $80 per fortnight between now and December 25. 

Is it possible to save $1000 in 12 fortnights? To be honest, everybody’s situation is going to be different. But most people have spare cash hiding in their budget somewhere. Our job as expert money elves is to help you find it, so let’s get started!

12 Christmas saving tips

1. Make your Christmas gift list

Christmas gifts are one of the biggest festive season expenses. Grab a piece of paper or open the notes app on your phone and create your “nice” list. These are the friends, family members and work colleagues you’d like to buy Christmas presents for this year. You can also jot down any gift ideas that spring to mind. 


9 Homemade Christmas Gifts People Will Use And Love >>

2. Create your Christmas budget

Creating a Christmas gift list is a great start. Now, you need to work out what’s actually affordable. The free MyBudget Christmas Budget Calculator is designed to help you create a financial plan for the festive season. As you add your Christmas expenses and allocate an amount of money to each, the budget calculator will update and show how much you need to save. Don’t forget to include all the little hidden costs—Christmas food, entertaining, decorations, wrapping paper, and so on. Use the free calculator to adjust your spending and come up with a Christmas budget that’s realistic and affordable. 


Your Free MyBudget Christmas Budget Calculator >>

3. Find more money to save

But what if you get stuck? What if money is tight and you can’t find any spare cash to save? You’re not alone. Millions of Australians rack up Christmas spending on their credit cards. No wonder the holiday season often feels less festive than it should. But the good news is that most people have spare cash hiding in their spending habits, for example:

  • Print out your bank and credit card statements for the last few months and use a highlighter to identify any overspending habits. Even little changes can help to free up spare cash for your Christmas savings.
  • Are you expecting a tax refund? The average tax refund is over $2000, more than double the average household Christmas spending level. As soon as your refund money arrives, set some of it aside.
  • If you’re struggling to stay on top of your bills, it may be time to talk with your creditors (people you owe money) about payment arrangements you can afford. A MyBudget money expert can help you create a budget and may even be able to talk with your creditors for you.

4. Automate your Christmas savings

Now that your free Christmas budget planner has revealed how much you need to save, the next step is to open a dedicated Christmas savings account. For MyBudget clients, this will be an automated expense stream in your budget. Please talk with a money coach if your Christmas stream needs adjusting or is not already set up. For other readers, this would be an account or sub-account you would open with your bank. The key is to separate your Christmas savings from your everyday money, so you don’t accidentally spend it. You can set up an automatic transfer between your own accounts or an automated pay disbursement with your payroll manager.

5. Do your Christmas shopping early

The mid-year sales are nearly upon us, not to mention Black Friday sales in October. Use these sales events to do your Christmas shopping early. This also leaves plenty of time for shipping. But whatever you do, don’t get hoodwinked into impulse shopping for things you don’t need. Stick to your gift list like egg to nog.

6. Manage expectations

With retail inventory levels low across the country and incoming freight in short supply, this could be a  good year to shop for second-hand, pre-loved presents on Gumtree and Marketplace, or at your local thrift shop. Start early so you can keep your eyes peeled for quality items, such as second-hand bikes, toys, fashion and furniture.


The Santa Factor: Managing Kids’ Christmas Expectations >>

7. Don’t forget to budget for fun

A common oversight at Christmas is to budget for gifts, then overlook the added costs of Christmas food, entertaining, drinks, Christmas decorations, wrapping, work parties, going out, Uber fares etc. Make sure you include money for fun in your Christmas budget. After all, that’s what budgeting is for—to make sure you have enough money to afford the things you love!

8. Factor in any income changes

Does your workplace close down over Christmas? Do you take unpaid leave? If your income might be affected by the festive season, make sure you factor reduced pay into your Christmas budget calculations.

9. Start squirrelling away Christmas items

It’s not too soon to start stashing Christmas food, decorations and other items when you see them on sale. Stock up on food that can be frozen, such as meat. And non-perishable items, such as serviettes, paper plates, wrapping paper and gifts.


12 Budget Christmas Meal Ideas >>

10. Spread the love by sharing the load

Organising Christmas doesn’t need to fall on the shoulders of one household. As you’re planning Christmas, talk with your friends and family about ways to spread the load. Can each person bring a dish to share? Or chip in money for a combined Christmas food budget? You can apply the same approach to gift-giving. Secret Santa is a great way to keep Christmas spending under control, especially with big families and work teams. 

11. Avoid a Christmas debt hangover

There’s nothing worse than waiting for a big, ugly credit card bill to arrive in the new year. And who says Christmas has to be expensive? The “perfect” version of Christmas, with mountains of presents and all the trimmings, is designed by retailers to sell us things we don’t need. Instead, plan the perfect Christmas for you. How about a picnic? Or sausage sizzle? Or build-your-own-burger? There are infinite ways to celebrate being together at Christmastime.


7 Budget-Friendly Christmas Getaway Ideas >>

12.    Be like Santa and ask for budgeting help

Everybody knows that Santa doesn’t make Christmas happen on his own. Aside from the amazing Mrs Claus, he has a whole team of helper elves. The same goes with taking control of your money—you don’t have to do it on your own. For free help with budgeting, talk with us at any time. MyBudget’s personal finance fairies and expert money elves are always here to help!

Ready to find out more?

Call 1300 300 922 or get started today

This article has been prepared for information purposes only, and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information in this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

All customised budgets and consultations with money experts are subject to MyBudget’s qualification criteria. We recommend that you read and consider our Product Disclosure Statement.

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