We know it is more meaningful to give presence than presents at Christmas, yet many of us still overspend and enter the new year with a financial hangover. The Australian Retailers Association predicts each person will spend an average of $2,320 over the holiday period. There are, however, some key things you can do to avoid overspending and reduce stress.
Gifts aren’t obligatory
A survey by CARE Australia found almost one in three people would prefer to see money go towards a good cause than be wasted on unwanted or unnecessary Christmas gifts. While the spirit of giving can be an important part of the holiday season, you don’t have to give something to everyone.
It is worth considering alternatives for family and friends including a ‘Secret Santa’, where each person brings a single gift for exchange on Christmas Day or another occasion. The order of picking a present is decided by lucky draw. Or you could draw names from a hat prior to Christmas if you would like gifts to be more appropriate for the person.
It is tempting to smother your closest and immediate family with lots of presents. Consider an alternative from Philip Hancock, the author of Organising Christmas: set a limit of (only) four presents to your very nearest and dearest: something needed, something wanted, something to read (or, for those who do not like reading, something to watch or listen to), and something to wear. These categories also help to provide some focus in a vast ocean of options.
Stick to a plan
For those on your gift list, set an overall and per-person limit on spending, track the amount you’re going through and stick to a budget.
Start early and shop strategically
Few people make their best purchase decisions under pressure. We can see this in the looks of panic on the face of shoppers during the final days before Christmas. It’s less than a month to Christmas, so start now!
If you get in early, you’re also more likely to be able to take advantage of sales. Shopping little by little allows you to spread the spending, and hear about those promotions while you consider your options. To help, you could use price-tracker websites such as Camel Camel Camel, which tracks prices on Amazon across nine countries. And you can also take away some of the stress by avoiding shopping at the busiest times, such as weekends and some weeknights.
Stack your savings
Smart shoppers do not leave money on the table. They use multiple ways to save on their Christmas spending. This starts with researching prices online, including using price comparison sites such as Google Product Search, and Kayak for travel. If you’re shopping at a bricks-and-mortar store, pick a retailer that lets you match their online prices. If you’re shopping online, check whether the retailer is listed on a cashback site like Cashrewards or a points site such as the Qantas online mall. These websites provide you with an additional small rebate (typically a percentage of the spend) or reward points for any online purchases when you click through to the retailer from their referring site. Any savings are on top of the retailer’s own discounts and promotions.
Another way to save is to use discount or coupon codes. You can search for these codes online, and then apply them before paying. Remember to factor in shipping fees when comparing costs, or look out for promotions when online stores offer free shipping.
Also check if your credit card has any promotions. Some financial organisations offer discounts, rebates or additional reward points if you register for these deals prior to your purchase.
You can also save receipts in case prices drop after Christmas. Some credit cards may also refund any price differences if you claim within a certain period of time.
All these savings can compound to hundreds of dollars. But don’t forget to pay off any credit card charges promptly. The savings can easily be eliminated by interest charges.
Beware of Christmas scams
Choice warns that holiday shoppers are a popular target for scams. These include fake Christmas greeting emails that load malicious software to your computer, and unsolicited calls and postal notices requesting payment for fake parcels or asking you to donate to a fake charity. Shoppers should also be wary of giving gift cards and vouchers. An estimated eight per cent of gift cards are never redeemed. The longer a gift card remains unused, the more likely it will expire, becomes lost or forgotten, or the store closes down. If you want to give money, give cash. In a Choice survey of its members, three in four people preferred cash over a gift card. See a list of the top Christmas scams here.
While there are lots of things to consider this Christmas, don't worry too much. Enjoy the holiday season. But, also be sure you know how much you're spending.