5 ways to stretch your Christmas dollars further

How to have a very merry – and affordable – Christmas

Christmas should be full of laughter and good cheer, and if you plan wisely, you can also avoid a spartan New Year spent paying off your yuletide spending.

With a survey finding that Australian shoppers spend about $10 billion on gifts alone, or $700 per person, by the time you also add in the costs of decorating, catering and Christmas travel, Christmas can become very expensive, very fast1.

But it doesn’t have to be a strain on your hip pocket. Here’s five tips to help you keep your Christmas spending under control.

1. Set a budget

Firstly, you need to understand how much you can afford to spend, so if you don’t have a budget in place for all of your usual expenses, our budget planner calculator can guide you through the process of setting one up.

Once you understand your financial position, you can estimate the total amount you can afford to – or want to – spend at Christmas.

Next, create a Christmas budget based on spending categories such as gifts, entertainment, catering and travel, and allocate money to each one.

Remember to allow for the season’s parties, events and social occasions, and the extra costs these can entail, such as taxis and incidental gifts.

2. Start planning early

Check out our savings account options as saving throughout the year is a great way to make Christmas more affordable.

With its pay, save and spend buckets, the AMP Bett3r account can help you to do just that, and you can automate your account to save a little from each pay until you reach your savings goal.

When it comes to Christmas, the earlier you start saving – and planning – the better. Some people use the Boxing Day sales to stock up for the following Christmas. This may seem extreme, but the thinking behind it is great.

Taking advantage of sales periods during the year and stockpiling gifts can help you make your money go further and spread the cost of Christmas throughout the year.

It’s not too late to take advantage of this strategy for this Christmas, by stocking up during sales periods between now and December 25.

3. Organise your giving

Gift-giving can be expensive, especially if you have a large family in which everyone expects a present.

Some strategies you could look to adopt to keep spending on gifts under control include agreeing a spending cap per person amongst your family members, or using a system where everyone buys for just one person, rather than the whole group, known as a kris kringle or secret santa.

And remember that not all gifts need be expensive. Handmade items or vouchers for massages, home-cooked meals, gardening, or home repair work are both thoughtful and cost-effective.

4. Share the costs

Eating a special meal with friends and relatives is a Christmas ritual for many people, but it can be an expensive one.

Some ways to make the Christmas meal more affordable include rotating the hosting duties (and the cost) between extended family members each year, buying items in bulk, asking each guest to bring a dish or drink, or getting your guests to chip in some money towards the cost of the meal.

And don’t forget to use up any leftovers!

5. Use cash

Research has found a link between the way we pay for purchases and how much we spend, so to reduce the risk of blowing your budget, use cash. By withdrawing the amount you’ve got to spend at the start of your shopping trip you’ll be able to easily keep track of how much you’ve spent and know when your money’s run out.

And to avoid the temptation of overspending or spending money you don’t have, leave the credit cards firmly in your wallet – or if necessary – at home.

And finally…

Above all, Christmas is about enjoying a break and celebrating with family, not about how much you spend. Remember the true spirit of Christmas, relax and enjoy!

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Any advice in this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters. AMP Bett3r Account is issued by AMP Bank Limited ABN 15 081 596 009, AFSL 234517. Consider the terms and conditions available on request by calling 13 30 30 or at amp.com.au/bett3r and whether this product is appropriate for you. Fees and charges apply.

Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any decision. Except where liability cannot be excluded, AMP does not accept any liability for any resulting loss or damage.