CHRISTMAS MONEY TIPS

Ah, the season of yuletide cheer and spending extravagantly! Christmas can be a financial tornado that leaves your wallet in tatters, resembling a deflated snowman. But fear not, my frugal festive friends, for we're about to embark on a journey to spend less during this merry season (and no, it doesn't involve substituting eggnog with tap water).

We've concocted a delightful recipe for a budget-friendly Christmas, one that won't have you trading your sleigh for a bicycle just to afford it. From DIY decorations that'll make your tree look like a Pinterest masterpiece to creative gift-giving ideas that'll keep your bank account jingling.

Don't get your tinsel in a tangle

You’re less likely to get financially entangled if you:

Make a list and check it twice. Write down your shopping list and set realistic spending limits for each person you intend to purchase gifts for (1 thoughtful present, not a sack full of novelty landfill). If inspiration fails, go with gift cards as these can buy a lot during the Boxing Day sales.

Price comparison magic. Before making a purchase, use the power of price comparison. Compare different stores, or use price-comparison websites or apps to ensure you’re getting the best deal. Ask the salesperson for a price match else move on.

Coupon crusade. Look for coupons, discounts, and cashback offers, both online and in-store. A quest for savings can often yield impressive results.

Early bird wins. Don’t wait until the last minute, start your shopping early to take advantage of sales and avoid last-minute, higher-priced items.

Track your spending. See where your money is going so you can be a budget master.

Jingle all the way

To help you ho, ho, hold on to your money and not look like a Grinch consider:

• Make, re-use, re-cycle, re-gift. Good for the environment and your wallet. Two-minute videos on ‘how to…’ will get you going. Pay it forward — especially for goodwill.

• Budget-friendly boundaries. Set up spending limits for gift exchanges and turn your gifting game into a friendly competition, where everyone stays within the budget.

• Secret Santa. Instead of buying gifts for everyone, consider a Secret Santa or White Elephant gift exchange. This is the perfect way to reduce the number of gifts you purchase while keeping the excitement alive.

• Home is where the heart is. Instead of going out to pricey venues, host gatherings at home, which can be more cost-effective and cosy. Ask everyone to bring a plate to broaden the buffet and showcase their talents. This saves you time and money, enabling you to spend more both with family and friends.

Sleigh that debt

It’s time to rein in lifestyle debt – and keep it down. Lifestyle debt relates to money you’ve borrowed to pay for things like presents or a holiday by using credit cards or personal loans. This type of loan can suck you into a black hole and diminish your wealth over time.

You pay interest on that borrowed money if the loan isn’t repaid in full each month – and that’s only if you’ve got a good credit card. That outfit you really had to have for the Christmas party ends up costing you more.

If you’ve got a mortgage, see how your budget’s impacted by testing your loan repayments rise by 3%. Called the ‘serviceability buffer rate’ it’s set by APRA and lenders are required to use it when checking if you can afford to repay a loan should interest rates rise — as they currently are.

By: Phillipa Billings - Tax Financial Adviser, Registered Financial Adviser, SMSF Accredited