Savings and the silly season

Don’t let the Christmas holidays undo your great work throughout the year. Be aware of spending patterns to turn silly season into savings season.

Last Christmas, a CommBank research study* said, Australians would spend $17.8 billion in five weeks from December 1 2014 to January 6 2015. Unsurprisingly, the spending would be mostly on gifting and holidays, but other major expenses included Boxing Day sales and entertaining friends and family.

During those five weeks, the study revealed, Australians were forecast to spend an extra $1079 each, with 3.2 million consumers hitting the shops on December 13 alone. Of the extra spending, $7.6 billion would go on gifting and another $4.6 billion on partying. But it didn’t all end at Christmas –another $2.6 billion would be spent during Boxing Day Sales!

So if you ever should be planning your finances, it is now, to ensure Christmas does not take away from the great financial work that has been done throughout the year. But how do we prepare for silly season without taking the fun out of it?

The first step is to make yourself familiar with your upcoming expenses.

This means budgeting. Where are your expenses going to be and what can you afford to allocate to each? How can you reduce the upcoming costs and which of them are ‘needs’ as opposed to ‘wants’? What types of bolt-on expenses come with the main ones – buying meals or catching taxis during a big shopping day or while away on holidays etc.

Set realistic and attainable budgets then formulate a plan to achieve them.

Be creative in your gifting – use price comparison sites and points from rewards programs, for instance. In order to balance out your spending, figure out which of your usual expenses you can go without. If you usually go out to dinner once a week, consider giving this a miss as you’ll likely be attending several festive dinners, for example. And do you really need to attend the Boxing Day sales this year? Are those purchases absolutely necessary?

Then put a plan in place to record your spending

There are several apps that do just that. It’s no use setting a budget if you can’t measure your performance against it. (We use and recommend Xero, but there are many options out there!)

Planning will help you avoid the Christmas guilt of over-spending. You need to remember the meaning of Christmas; which is not about spending a lot of money!

Rather than stressing about the cost of everything, plan plan plan, and then enjoy the time you spend with family and friends.

You don’t want to spend January wondering where the money went!

* www.commbank.com.au/about-us/news/media-releases/2014/festive-spending.html

 

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*Roha Pty Ltd, As Trustee for The Tyrell Family Trust, Trading As: Vivid Accountants & Advisers, ABN 25 146 761 364 is an Authorised Representative of Count Financial Limited.  Bronwyn Tyrell is also an Authorised Representative of Count; Authorised Representative Number: 288117.

‘Count’ and Count Wealth Accountants® are trading names of Count Financial Limited ABN 19 001 974 625 Australian Financial Services Licence Holder Number 227232 a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Count is a Professional Partner of the Financial Planning Association of Australia Limited. Count advisers are authorised representatives of Count. www.count.com.au

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