Contributed by Mrs Nimi Akinkugbe
It’s that time of year again! Where did 2012 go? For many, the approach to Christmas has become a time of too much expectation, and far too much pressure. As the seasonal blitz with its attendant flashing lights, piped carols, colourful ads, draws near, you find yourself caught up in the whirlwind of activity. Whether you look forward with excitement to the shopping and preparations or with some dread at all the stress and disruption to your life, the strain and drain on your resources, be careful not to overspend. Here are a few suggestions on how to get through Christmas without throwing your finances into disarray.
Avoid last minute shopping
Are you one of those found in the shopping mall panic buying at 9.30pm on Christmas Eve? Let’s try to change things this year. Shopping under pressure will lead you to overspend and you are more likely to buy gifts that are not appreciated by the recipients. Shop early; if you begin now, you can shop around for more meaningful, appropriate gifts than you would find in a last minute shopping spree.
Accumulating gifts throughout the year eases the pressure and you won’t feel the strain of buying several presents all at once. By the time Christmas arrives, hopefully, you will have only a small amount of shopping left to do. After Christmas sales are also a useful way to prepare for next year, as many items are sold at much reduced prices in January.
Stick to a budget
Wouldn’t it be wonderful to be able to buy special gifts for all your loved ones? The reality is that funds are limited and the extended family is huge. In an ideal world, one should have started to set money aside specifically for Christmas over a period of time so that when it is time to shop you have the cash in place.
As we get close to Christmas and before the shopping frenzy gets into full gear, put a simple Christmas budget in place; it will help you determine exactly how much you can afford to spend on Christmas and all its trappings; gifts, decorations, Christmas cards, extra food and drink, new clothes, entertainment, phone calls, charitable donations and travel. Don’t forget to include a little indulgence for yourself. Add up the total and compare that with what you have available to spend. If it’s more than you can afford, don’t feel pressured to overspend, just look for areas to trim. Remember, most people are in the same boat. If you are wondering whether you should drop a person or family from your gift list, you can be sure that they are also considering dropping you!
Food is a major Christmas expense. In the run up to Christmas, we tend to buy far too much food, and so much of it will go to waste. Plan your Christmas food requirements now and make a list of all that you will need. Prices usually go up significantly from mid November so bulk-buying of things like rice and some of the non-perishable items, which can be shared with friends and family can take some pressure off your finances, in the weeks running up to Christmas.
“Making a list, checking it twice”
Once you have a budget, make a list of friends and family for whom you wish to purchase gifts and how much you think you can afford to spend on each person. Remember those who have been particularly helpful through the year and don’t forget to include a few extra gifts under the tree as someone is bound to show up unexpectedly. Sometimes you receive a gift from someone not on your list and feel obliged to reciprocate. If you stick to a budget, you will be better prepared for the new-year when the really important bills like school fees start to come in.
It’s the thought that counts…not the amount
Most people appreciate a thoughtful gift, something that demonstrates love and care, without necessarily being expensive. Often gifts of great sentimental value, such as framed photographs, a potted plant, or a special book or DVD, aren’t that expensive. It is also a way of teaching your children by example that thoughtfulness is more important than price. Encourage them to use their talents and present handmade gifts such as art work or has home made biscuits for their grandparents, aunts and uncles who will treasure their handiwork. If you plan well in advance, you can make up hampers for friends and family that are customized with the recipient’s favorite delicacies in mind.
It’s always nice to have some extra cash over the holiday season. If you are employed and fortunate enough to receive a Christmas bonus or 13th month salary this year, don’t spend it all; put it to good use. It is tempting to plough it all into Christmas festivity, but by spending your whole bonus on short-term expenses, you could be forfeiting a great opportunity for build your savings. After indulging yourself a little, invest the balance in something that will contribute to your long-term financial security. You might consider investing part of your bonus in the stockmarket or add some cash towards your emergency fund, or pay off or at least reduce any high interest debt.
Gifts that keep giving
The pressure from children to buy the latest high-tech gadget, smart phones and toys can be overwhelming. Presents that improve personal finances are an ideal gift at Christmas; not only do they outlast expensive toys and gadgets, but they may continue to give, long after the wrappings have been thrown away.
The gift of stock or a lump sum mutual fund investment is a thoughtful financial gift to a young child and could be the start of a rewarding long-term savings plan. A mutual fund is a professionally managed that pools money from many investors and invests in investment securities such as stocks, bonds and money market instruments. Choose a fund managed by a reputable company with a sound track record. The fund manager will advise you on the most appropriate fund for your purpose. Decide on how much you want to invest, and complete an application form. The company will issue you with a certificate in respect of the investment; this can be presented to the beneficiary.
Teach your children the gift of giving
If you look in your cupboards you are bound to find many gifts you never found a use for from birthdays and Christmas’ past. There may be gifts that are still in their original boxes that will make ideal gifts this Christmas. Open any gifts you receive early and rewrap the ones that you will not use and give them to others who will really appreciate them – make sure you keep a list of what came from whom to avoid the embarrassment of giving back to Uncle Celestine the same basket of plastic fruit that he gave to you!
It is not enough to just tell children to be charitable and kind. Our own actions in supporting others will speak louder than any thing we can say. We must guide them through a program of action so that becomes ingrained into their psyche. It teaches them a powerful lesson that they can have a positive effect on the wellbeing of others. The current flood disaster that has ravaged our country provides a vivid lesson and a great opportunity to demonstrate that one can and should take practical steps to alleviate the suffering of others. Thousands of people have been displaced by the terrible floods and face the prospect of untold suffering in the run up to Christmas and beyond if we don’t all do something to help. It could have happened to any of us.
Even in such dire situations, there will always be wicked, unscrupulous people who will try to take advantage of your generosity so try to identify credible organisations that will efficiently distribute the relief materials including the following:
Medical Women’s Association of Nigeria (MWAN) Secretariat, 34 Market Street, Oyingbo and Pat’s Nigeria Flood Relief Effort, 6 Balarabe Musa Crescent, Victoria Island, Lagos.
Avoid borrowing if possible
Don’t borrow money just to pay for a great Christmas. Be realistic and spend what you can comfortably afford today without going into debt. It is usually better to pay with cash to purchase toys and other gifts, rather than to borrow as the interest cost will make everything so much more expensive.
It is not very pleasant to have someone dampening your enthusiasm and telling you to be careful and control your spending but here is a word of caution; many Nigerian families will still be paying for their Christmas indulgencies well into 2013. There is still time to get your finances in some kind of order before the festivities begin. Don’t wait until the last minute.
10/11/2012 By Mrs Nimi Akinkugbe, Lagosmums money management and financial specialist. For further questions or advise send email to [email protected]