10 Ways to Actually Stick to Your Budget *Christmas Edition*

It's meant to be the most wonderful time of the year, but for many, Christmas can be a very stressful time financially. With office Secret Santa's, Christmas drinks, meals out, decorations & presents, Christmas can very quickly become very expensive.

In the Christmas of 2020, a study found that 1 in 3 Aussies racked up credit card debt.

HOLD UP...

1 in 3 people were still paying off Christmas presents in January! That is a HUGE percentage of people who are experiencing a debt hangover. If you are someone who needs help putting together a Christmas budget, sticking to a budget or even just tips to spend less over the holiday period, then keep reading.

How to Create a Christmas Budget

Before we create a budget, let's work out how much money you have to work with.

How Much Should You Budget for Christmas?

In order to calculate how much money you have available to spend this month, write down:

1. How much money you will make between now and Christmas (e.g. $1000)
2. List your ongoing expenses for a month: mortgage, rent, electricity, petrol, phone, groceries (e.g. $500)
3. Calculate your budget by subtracting your expenses from your income (e.g. $1000 - $500 = $500)

If your Christmas budget is:

TOO LOW: Try reducing your expenses by negotiating better rates for your bills, spending less on groceries or catching public transport.

TOO HIGH: If you calculate your budget and it is higher than you want it to be then great work! Put the extra money into a savings account to look after future you.

How Do I Set Up a Christmas Budget?

Now that you've got a budget total, time for my favourite part of Christmas budgeting - the breakdown!

1. Start by making a list of all the people you want to buy presents for - be realistic here.
2. List any other Christmas expenses - these may include wine to take to dinners, groceries for Christmas meals, decorations, a Christmas tree, wrapping paper etc.
3. Write the costs next to all of the items on your list and add them up.
4. Chances are your ideal list will cost more than your budget so it's time to ditch the money wasters. Go through your list again and ask yourself which are the 'essentials' and which are the 'nice to haves.'

👉 Example: An essential might be a present for a parent whereas a 'nice to have' might be Christmas crackers to put on the table.

Once the value of your list is equal to the total budget you set out earlier, it's time to go shopping!

How Do I Stick to My Budget?

Putting together your budget is the easy part, the hard part is actually sticking to it. But not to worry, I've got 10 tips that'll ensure you stay within your budget and may even have some extra cash to spare (what a money win)!

1. Adjust Your Expectations

Christmas comes around every year - if this one isn't what you dreamed of, there are plenty more to come. Also remember that spending money doesn't equal a happier holiday time - especially if it results in debt.

2. Cut Spending in Other Areas

Remember your list of expenses you wrote down? Time to pull that back out and review it. Are there any items on here that you don't need this month? Can you spend less on groceries? Catch public transport? Negotiate better rates for your bills?

👉 Pro Tip: Compare the Market is a great tool to compare prices on household bills, life insurance and car insurance. Compare Mobile Plans is perfect for finding the cheapest phone plan for you!

3. Time to Get Creative

After adjusting your expectations & reducing your expenses, you still may not have enough money to get all the presents/ decorations that you wanted. But do not fear my friend, it's time to get creative! Think of gift ideas that are DIYs, sentimental or an experience.

👉 Pro Tip: Gift a friend an experience such as a movie night at your place or picnic at the park. You can create a voucher for this in Canva (for free)!

4. Don't Buy, instead DIY

Do you really need to buy wrapping paper? Christmas cards? Bon bons? Look up how to make these yourself on Pinterest.

👉 Pro Tip: Canva has Christmas card templates that you can type your message into and then print out if you want a more professional looking card.

5. Write a Shopping List & Stick To It

Write down your list of items you are buying and their respective prices on a piece of paper. As you purchase each item, physically cross it off. If an item is not on your list - you do not buy it. It doesn't matter how much you think your friend would like those socks with dogs on them - walk away!

6. Try Using Cash

Another idea if you are finding it hard to stick to your budget is to take out physical cash and put the exact amount you need in an envelope. Once you have spent it all - that's it! Many people feel disassociated from their purchase when they just tap a card so handing over physical cash can help keep you on track.

7. Do a Secret Santa or go in on a group gift

Now I am not suggesting that you organise Secret Santa's with all of your different groups of friends, if you wouldn't usually buy each other presents. This suggestion is for people you would usually be buying for.

👉 Example: Instead of buying presents for every member of your family, organise a Secret Santa where you each buy for one person.

8. Track Spending as you go

There are so many great budgeting apps which you can download and use for free. I personally love Buddy, which you can use to enter your budget and expenses. It will give you a running total of how much you have left to spend for the month.

9. Ignore Sales

If an item is on your list and it happens to be on sale - great! Buy it. However if there's an item you see on sale that is not on your list, walk away. This includes the chocolates and other trinkets that they put in shops near the checkout while you are queuing.

10. Remember Why You're Doing This

Sticking to a budget it hard work but is so worth it. If there are any points you are struggling to stay on track, go back to why you are doing this. I promise it'll be worth it when you get to January and are free of Christmas debt and stress.

Now that you have a budget and a plan in place, it's time to relax and enjoy the holiday season.

Which of the above tips will you be trying out this year?

Disclaimer: The content presented by Milky Way Blogger is provided as general information purposes only and should not be taken as accounting or legal advice. You are responsible for your own due diligence and should seek a financial advisor if necessary.