5 Ways to Plan Your Christmas Spending (& Reduce Your Christmas Stress)

26 October 2022

Christmas is a wonderful time of the year.  There is a buzz in the air at the prospect of a special time with friends and family, travel and time off work, or special gifts from loved ones. Even our grinchy friends can be influenced by the irrepressible joy of carols on the radio and fragrant cinnamon-flavoured goodies.

However, for many Australians, Christmas is a stressful time financially. This stress can take its toll and rob the holiday of its joy.  A study by Finder found that the average spending per Australian is $1,232, with 55% using savings to fund their Christmas, and 23% going into debt. Australians spend the most on presents, closely followed by food and travel. With the cost of living rising, and inflation putting pressure on average families, now is the time to prepare financially in order to make the Christmas memories you'll treasure without the money stress. In this article, we'll give you 5 ways to make a difference in your Christmas starting now.

1. Put Money Aside Now

For many families, Christmas is worth significant amounts of effort.  We recommend you start saving now to ensure you have a stockpile of cash to make your gift-giving and Christmas dinner that bit more special without the financial hangover.  How to do this well? Calculate how much you usually spend or how much you're likely to spend on Christmas and divide that by how much time you have to save. This will give you a weekly amount to put aside.  If the weekly amount to put aside is out of reach, you might want to adjust your planned Christmas spending. Of course, the earlier you start saving, the more money you'll be able to spend on that big Christmas lights installation in your front yard!

2. Don't Budge on your Budget

It can be so easy to be influenced by what other people are doing for Christmas. Instead, know what you can spend and plan how you'll stay within your means. The Salvation Army reports that 41% of people are financially stressed by Christmas. 26% are concerned they won't be able to afford Christmas expenses, but 23% of Australians feel pressure to spend more than they can spare.

Make a choice now to put yourself and your family first - and this means being financially responsible for the future. Spending as you go is disastrous to your bank balance - instead plan out how much you'll spend per person, and how much you have available for food and decorations.

Over time, this process will save you stress, credit card debt, and that feeling of dread you get when you think about Christmas shopping!

3. Say No to the Rubbish

One thoughtful gift is worth so much more than 100 cheap plastic gifts. For the sake of the environment and the minimalist aesthetic, make a choice of quality over quantity. One thoughtful, special and lasting gift will make a bigger impact than a whole bunch of smaller gifts that won't last. This particularly applies to kid's toys!

One way to do this is to make a list and don't buy gifts outside of the list. This way you can make sure that you don't have those last-minute splurges on body-wash sets for everyone you have forgotten.

Another option to reduce excessive gifting is Secret Santa - a favourite tradition shared by workplaces & large families!

You're not alone in trying to find the best way for your family - Finder's research shows that 22% of Australians put a limit on gift-giving, while 10% opt for handmade gifts. Get creative this festive season and say no to unnecessary and rubbish gifts!

4. Set a Christmas Tradition​

Family traditions are truly the most precious memories that many of us have of our childhoods, and for many adults they provide a warm sense of home and belonging. Whether you have a family of your own or not, setting Christmas traditions can provide the love and atmosphere you are looking for, without the price tag.

Some simple ideas include baking together or cookie exchanges, gifting hand-made ornaments, decorating the tree together or spending time together visiting the local Christmas light displays. Or you could bring the meaning into Christmas by observing Advent together, attending a midnight mass or carols singing event, or donating your gifts to children in need.

Christmas traditions pay off hugely over the long-term in memories and meaning, while in the short term, they can help you slow down and focus on what really matters instead of spending lots of money.

5. Share the Burden

With travel and food making up the rest of the Christmas spending, it's time to consider if what you're doing really works for you. Travelling to see family and great food are both non-negotiables at Christmas for very good reasons. If you can afford it, you should do it. However, if you need to reconsider your spending in these areas, perhaps you can work with your loved ones to share the cost of Christmas dinners by 'bringing a plate' or BYO alcohol. If travel is an issue, negotiate to take it in turns to travel - and maybe start saving up for next year!  A holiday at home can be just as exciting - take the opportunity to explore your area and do something touristy you haven't done before.

Family expectations can make life complicated at times. We recommend setting expectations early and providing backup for your decision. If you are working to create a more secure financial future for your family and therefore you are limiting spending at Christmas time this year, then good for you.

We hope you have a wonderful Christmas and come out the other side without a cent of Christmas debt.

If you need assistance in taking the next step toward your financial future, our Top 10 Financial Advisors are here to help. Contact us today.