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8 tips to avoid overspending this Christmas

Samantha Menzies
·Contributing editor
·4-min read
Sad woman holding phone at home on christmas holidays
Make some plans now to avoid the regret. Image: Getty

It’s been a difficult year, and while the COVID-19 pandemic may have changed the way Aussies plan to celebrate Christmas for 2020, it hasn’t dampened spending.

In fact, recent data revealed that the average Australian plans to spend a whopping $1,325 each this silly season, which is a significant amount considering how many of us are struggling to make loan repayments or find employment.

Sure, the shortcomings of 2020 have put us all under strain and splashing out at Christmas is an easy way to forget about the hard times and instead live in the moment and ‘treat’ our loved ones and ourselves.

But unfortunately, when the calendar clicks over to January 2021, the negative effects of spending big (high credit card statements, increased debt, tight budgets and lots of stress) quickly set in and feelings of regret can hit an all-time high.

But there are some ways all Aussies can avoid the stress over overspending this Christmas.

Here are eight of them.

Set a budget

The first thing you need to do to avoid overspending is decide how much you’re going to spend, and then stick to it.

This includes not only who you’re going to buy Christmas presents for, how much you’re prepared to spend and then that you plan to buy those people, but also adding up your travel costs, food, decorations and any special events.

Without a budget it's easy for spending to get out of control and you’ll end up with a bill far higher than you’d ever expected.

However knowing, and planning, what you expect to spend for the duration of the Christmas season this year can save a lot of stress (and money) in the long run.

Establish expectations early

This one goes hand-in-hand with your Christmas budget planning.

Do you know everyone you’re going to buy gifts for? And have you agreed a budget with your family or friends?

Another easy way to overspend is via miscommunication which could see you either having completely unnecessarily overspent, or perhaps your spouse thought you were treating each other this year while you thought you were exchanging homemade gifts, resulting in a last minute dash to the shops to buy whatever is on offer.

Equally, if you’ve decided to cut down on your spending and not do as many gifts this year, you’ll probably want to let people know.

Either way, the budget-friendly version is one planned ahead.

Track your spending

So you have a plan, a budget and a list of what you want to spend.

The next trick is to keep track of it - after all, there is no use having a plan if you don’t stick to it.

A great way to hold yourself accountable is to set money aside into a separate account solely for Christmas season spending. That way you can withdraw exact amounts as you’ve budgeted and avoid overspending my mistake.

Use your vouchers

Christmas is a great way to get rid of those unused vouchers.

It’s worth rifling through your drawers and wallet for any remaining gift cards and use the store credit for gifts.

And why stop there? It’s also a great opportunity to spend all those accumulated supermarket, shop, hotel and airline rewards points and put them to good use.

Don’t say ‘yes’ to everything

This year might be a little different in terms of social engagements over the festive season, but while Christmas parties may quieter and COVID-safe gatherings are less extravagant than before, even a few invites per week can leave a serious dent in your budget.

Instead of accepting every single invitation, pick the most important events and spend your time and money on them instead.

Share the catering load

If you’re hosting a Christmas event this year, or even the big day itself, share the catering load and ask each friend or relative to bring some food or drinks to contribute towards the meal so you’re not left footing the bill for the entire lot.

Shop around

Before committing to that purchase, make sure you’ve done some research to ensure you can’t get it cheaper elsewhere. A quick Google search is all it takes for peace of mind knowing you’re not spending more than you need to.

Limit self gifting

‘Self-gifting’ has become a significant holiday trend over recent years with shoppers treating themselves to their own gifts when they’re out shopping for others.

To avoid overspending, let someone else treat you instead… unless of course you’ve already budgeted for it.

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