With the holidays right around the corner, there’s certainly one factor that can make or break the way you celebrate this Christmas season:

Your spending habits.

Christmas comes once a year and while it is certainly a good reason to splurge and treat those who are important to us, especially after the last 18 months or so, but going overboard can backfire.

Here are some helpful tips to make your Christmas spending to a minimum:

Tip 1: Make a budget

The first thing you should do is create a budget specifically for holiday spending.

Let’s face it — giving gifts is both financially and mentally draining. For some people, it takes the fun out of the holidays.

Setting up a budget that is well within your means should be the first thing you should do. If you don’t know how to set up one, here are some steps:

• Look at your monthly income. This doesn’t stop with your salary — any amount of money that you earn, no matter its source, is already a part of your monthly income.
• List down expenses. The four basic expenses in every household include food, shelter, utilities, and transportation. These should be your priority. Next are the extras — cellphone bill, cable TV bill, etc.
• Follow the zero-based budget. Now that everything is all accounted for, deduct your expenses from your total monthly income. You should reach zero dollars — nothing more, nothing less. It’s ok if you don’t get it at the first few tries. This just means you need to move your money around your current expenses.

Knowing your current monthly expenses gives you a clearer idea of how much you want to spend this holiday season.

How much should I spend?

The better question is — how much do you WANT to spend?

Thinking about money and spending sometimes takes the joy out of gift giving, which shouldn’t at all be the case. Sometimes we mentally pressure ourselves to buy this or that, only to feel its effects when the New Year comes rolling by.

Setting up your Christmas budget depends largely on how much you make and how much money you’ve set aside already so far. List down people you want to give gifts to and set a budget for each person.

Most people don’t stick to their budget, which is how their finances can go awry. You should learn how to move around expenses as you buy each gift. For example, if you have allotted $100 for your spouse but only spent $80, the excess $20 can go to your mother-in-law’s budget.

Moving your expenses around helps keep your money spending on track, and you might even have a few extra bucks left too!

Tip 2: Be wary of Christmas “deals”

Most stores employ a marketing strategy to help entice potential customers to spend more than they want to. The bundle of blankets you think is such a steal can actually cost much less if you buy them individually during another sale period.

Before you jump right into a deal, make sure you do your homework!

Many stores know that people are itching to spend on gifts – whether on others or themselves – and they want to take advantage of this.

A good rule of thumb is to only buy what you need and to stick within your budget.

Tip 3: Extra income, anyone?

During this time of the year, why don’t you start a small business or find a part time job to help pay for holiday spending? This is a great idea because you won’t be tapping into your savings account for gifts and you can set aside whatever you earn for your Christmas budget. Try selling some of your stuff online too!

Who knows? You might end up finding your dream job this way!

Tip 4: Secret Santa with Friends

If you think you’re the only one worrying about spending, think again – some of your friends might just be in the same situation as you are.

Suggest a Secret Santa amongst yourselves and set a budget for the gift. Better yet, make it fun and creative this year: gifts should be homemade! This is a fun project to do and the gift itself becomes even more meaningful because you put a lot of effort into creating it.

Tip 5: Buy gift cards online

If you have no idea what to give someone, why not give them a gift card?

If you’re very familiar with their interests, you can buy one from their favourite store. For example, your teenage niece might be into clothes right now; a gift card from a department store would certainly be a wise decision.

You’ll be surprised at how many gift cards are being sold at 20% off of their value online. Check out websites like eBay and buy a gift card for a no-brainer Christmas present.

Tip 6: Loyalty points can help save on spending

Loyalty points can significantly lessen your spending at the supermarket. If you’re going to prepare a festive meal for your family, take advantage of those points you racked up these past few months and use them!

The supermarket is also a great place to buy things like gift wrapper and cards too.

Tip 7: Have a no-gift Christmas

This might sound a little extreme but you and other adults in the household can agree to have a no-gift Christmas this year and instead focus on giving the children.

Whatever amount that would have gone to gifts can be spent on other things such as a fancier Christmas supper or maybe even for a trip to the beach to celebrate the holidays.

You’ll be surprised at how many people might actually be into this idea, because, like we said, it can be stressful trying to find the right gift!

Tip 8: Money Matters

Indeed, money does matter during Christmas time, but it shouldn’t be the cause of stress. When you practice self-discipline and learn how to spend within your budget and your means, you’ll realise that the holidays can be a very enjoyable time of the year — as it should be.

Money issues and concerns come in all shapes and sizes, but there are resources out there to help you effectively manage your money.

For example, if you run a small business and are having trouble recovering payments from customers, you can talk to us here at JMA Credit Control. We offer a debt recovery service for small businesses that can take the headache out of your debt recovery efforts so you can pay attention to the other important things!

If you want to get in touch with us to discuss your needs, give us a call on 1300 664 223.

Happy holidays everyone!