Christmas time is very important, but do we need to put ourselves under so much pressure to overspend? You don’t have to compromise your fun; you can have a great Christmas and still leave money in the bank. Here’s how:
1. Prepare a Christmas Budget
Before you begin any Christmas shopping, prepare a Christmas Budget. How much are you willing and able to spend this year on Christmas and all its trappings; gifts, decorations, extra food and drink, clothes, entertainment, phone calls, charitable donations and travel. Compare that total with what you have available to spend. If it is more than you can afford, just look for areas to trim.
It’s a great idea to plan a budget but it’s more important to stick to it. The key to sticking to a budget is bearing in mind the total amount you have allocated to each category and do not allow yourself to go over that amount.
2. Make a List…and Check it Twice!
Make a list of friends and family for whom you wish to purchase gifts and allocate an amount for each person. Remember those who have been particularly helpful through the year and include a few extra gifts for unexpected guests. Sometimes you receive a gift from someone not on your list and feel obliged to reciprocate. You will have to drop some people from your list; don’t worry; they are probably dropping you too!
3. Avoid Borrowing to Fund Christmas
How much can you afford to spend 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 only make everything much more expensive particularly if you use your credit card. Many families will still be paying for their Christmas overindulgence well into 2017 at a time when school fees are due. Don’t let that be you.
4. You Can Still Save for Christmas
If you are able, set aside a certain amount each week between now and Christmas, so you build up spending money. Do you spend thousands of naira each month eating out or buying takeaway lunch meals? Why not save this by taking a packed lunch to work every day between now and Christmas. It all adds up.Start saving a small amount each month from January and next Christmas will be effortless.
5. Make Your Travel Plans Early
It may be too late to secure discount fares now but don’t get caught out next time. Advance bookings are often cheaper.
6. Shop Now for Christmas, Bit by Bit
Shopping under pressure will lead you to overspend. Shop early; that way you can shop around for more meaningful, appropriate gifts than you would find in a last minute shopping spree. Between now and Christmas, add some Christmas shopping to your usual grocery shopping. Don’t wait until the last minute. Acumulating gifts throughout the year eases the pressure and you won’t feel the financial strain of buying several presents all at once.
7. After Christmas Sales
After-Christmas sales are a great opportunity to pick up gifts cheaply as many items are sold at much reduced prices in January. This is a useful way to prepare for next Christmas!
8. Buy in Bulk
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 end up in the dustbin, wasted. Plan your Christmas food requirements now and make a list of all that you will need. Consider bulk buying of some items that can be shared with friends and family. You can share the cost of a cow, a turkey, a sack of rice, and other Christmas needs.
9. Declutter and Make Some Money
If your home store is full of presents at Christmas, now is the time to take stock and decide what to sell or pass on. Dig up all those gifts you never used that are cluttering up your shelves. Before you give everything away, consider whether you could offset some of your Christmas costs by selling some stuff. List your items on OLX and you will be surprised how many people will be so happy to purchase things that you no longer have any use for.
10. Split the Cost
If you are expecting the extended family over this Christmas, which could be dozens of people, split the cost so that one person buys and prepares the starters, one does the main meal and another the deserts. The joint effort will save you money and you can still enjoy family bonding time. Don’t let Christmas catch you by surprise.
11. Try A “Secret Santa” Approach
Are you hosting a big family Christmas with your extended family? 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 and friends can be unlimited. Try a “Secret Santa” approach which allows everyone to buy just one present. Set a maximum price limit for gifts so that the richer relatives don’t make the poorer relations feel bad.This is so much fun as it saves so much cash and leaves everyone excited and guessing as they open their gifts.
12. Give Your Children The Gift Of A Mutual Fund
Presents that improve personal finances are an ideal gift at Christmas; not only do they outlast expensive toys and hi-tech gadgets, but they may continue to give, long after the wrapping paper has been thrown away. The gift of stock or a mutual fund investment is a thoughtful financial gift to a young child and could be the start of a rewarding long-term savings plan. You can invest with as little as N5,000.
13. Encourage Your Children To Use Their Creative Talents
Encourage your children to present handmade gifts to loved ones who will treasure them. Often personalized gifts or those of great sentimental value, such as framed photographs, painted pictures from school art class nicely framed, recordings of a grand-daughter’s song, a piece of poetry, some specially baked cakes, or a specially grown potted plant, do not cost and will be much appreciated. This is also a way of teaching children valuable lessons that it is not all about money; thoughtfulness is far more important.
14. Send The e-Christmas Cards
I am sentimental about traditional Christmas cards but if you aren’t, then send e-cards instead. You can do good through your Christmas Cards by sending them in conjunction with a charity such as UNICEF or other philanthropic initiative.
15. Make A Natural Christmas Tree
If you are unable to afford a new Christmas tree, pick up some scrap branches on the roadside where trees have been felled at construction sites. Stand them in a large flower vase and hang up your favourite baubles. It will look absolutely stunning with a bright ribbon tied around the vase. This always adds a special touch for additional décor, even where you have the main tree up.
16. Make Your Own Christmas Hampers
Home made Christmas hampers for friends and family make great gifts. Buy the contents in bulk and divide them up among the hampers. Decorating and filling up the hampers will provide much fund for your children as well as provide valuable lessons.
17. Are You Getting A Christmas Bonus?
If you are fortunate enough to receive a Christmas bonus, try not to spend it all. By spending it all, you could be forfeiting a great opportunity to build your savings. Invest at least a part of it to pay off or at least reduce your high interest debt, add some cash to your emergency funds, or invest part of it.
18. There Are People Far Worse Off Than You
It is important to remember that even though the recession may have affected your family badly, there are so many people far worse off than you. Even though things are rough, spare a thought for others in need. Giving doesn’t always have to be about money. You can give of your time, talent, or expertise. Involve your children; this will teach them powerful lessons that they can have a positive effect on the well being of others.
Don’t forget the reason for the season.In all the festivity, it is so easy to forget the essence of Christmas and the values espoused about loving one another and not money.
Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
For more personal finance tips, follow Nimi on Twitter and Instagram: @MMWithNimi. On Facebook & Google+: MoneyMatterswithNimi. Her Website is www.moneymatterswithnimi.com or you can send her an email: [email protected]