Saving money for Christmas

“Have yourself a merry little Christmas, let your heart be light. From now on, all our troubles will be out of sight.” — Frank Sinatra

In the wise words of Sinatra, make sure your Christmas is as stress-free as possible so that you can focus on and enjoy the important things that the festive season brings, such as spending time with family and friends.

It’s easy to get carried away in the consumerist whirlwind of the silly season and find yourself in unnecessary debt in the new year. It’s also sometimes challenging to pay for Christmas expenditure with December’s pay packet alone, so it makes sense to save up as much as you can beforehand. Christmas may still seem like weeks away, but it’ll come around faster than you can sing Rudolph the Red-Nosed Reindeer, so it’s best to start saving as soon as you can.

There is a trend for South Africans to spend far more on their credit cards over the month of December than during other months of the year. However, it’s advisable to try to avoid borrowing money for the holiday season, as this may come with interest and fees that could set you back on achieving your financial goals and responsibilities in the new year. So here are four handy steps, published on The Money Advice Service, that will help you to save in the countdown to Christmas.

1. Set a budget
First things first, set yourself a realistic budget that includes food, presents, travel, decorations, and general festivities with friends. If need be, curb your enthusiasm in some areas — it could be worth sacrificing one night at a restaurant to be able to splash out a bit more on a loved one or some Christmas day aperitifs.

To begin on your budget, make a list of who you want to buy presents for, and allocate an amount for each person. If you are hosting Christmas lunch, then get confirmation for how many people will be coming over so that you can work out how much you will need to spend on food and drink. If you are tight on cash, consider sharing duties — so one person brings dessert, while another is in charge of salad.

2. Work out how much to save each week
Treat saving for Christmas in the same way as you would put money aside to pay a bill. By committing to saving a regular and manageable amount each week from now on, you’re far more likely to set yourself up for a Christmas win.

Start small if need be, by placing just R10 of loose change in a jar a day, or a R100 note each week. And, if that works, try putting aside a bit more from the start of December.

3. Start some new, affordable traditions
Consumer confidence in South Africa is currently quite low due to many financial pressures, such as elevated inflation, weak economic growth, a rise in interest rates, and an unstable political environment. However, many people still feel under pressure to please loved ones at this time of year, and to especially give children the “perfect Christmas”. This causes people to overspend and lose sight of the spirit of the season, which is to love our fellow man and spread goodwill.

Consider starting some new Christmas traditions that the whole family can do together. These may not only save you money, but will also help you to shift the focus to what Christmas is really about.

Get creative and make your own decorations, crackers or even presents. Offer sentimental gifts that may not cost much, but are highly valuable to the receiver because of what they represent. It’s also worth deciding as soon as possible on what you want to buy someone. Shopping for items in advance can help to spread the cost and save you from panic-buying goods just for the sake of it. A bit of planning may also enable you to find second-hand gifts that are as good as new and would still be adored.

Furthermore, it’s worth embracing the digital age and emailing Christmas messages to save on cards and postage costs. There are lots of free websites nowadays on which you create your own personalised cards, which are environmentally friendly, as well as affordable.

4. Put your savings in a safe place
If you’re only in a position to save a small amount each week, then it may be best to simply store it in a jar or tin in a secret spot. However, if you’re saving an amount that will quickly become a tidy sum, then it’s worth transferring the money on a weekly basis into an instant-access savings account if you have one. Try to see this as a separate savings pot specifically for the festive season, and be strict with yourself by only dipping into it if it’s for something Christmas-related.

While the December holiday period is a great time to simply enjoy life with family and friends, make sure that you don’t stretch your spending beyond what you are able to pay back. Follow these basic steps and don’t hesitate to arrange a meeting to discuss any financial queries or worries you have. Then have yourself a merry little Christmas now.

Posted in Blog, financial-planning.