At this time of year – when lunches outlast daylight and Chaddy retailers get ready for forgetful husbands at ungodly hours – your monthly budget is put to the test.
But you can pull the reins on your holiday season spending without forsaking the festive fun.
At Neue Black, we know that Financial Wellness is essential for everyone: whether you’re an ASX-listed CEO or a First Home Buyer trying to keep on top of your mortgage re-payments, being in control of your finances is a must.
Financial Wellness has a broad impact on people’s lives. Financial stress can impact productivity at work, trigger depression.
Analysts predict Australians will spend more than $50bn at retailers this holiday season. The largest increases in retail items will be in food and drink ($21.7m) and clothing and apparel ($4.2bn).
That’s a lot of glazed ham and Google Nests!
But to ensure New Year’s Day doesn’t roll around with a gaping hole in your bank balance, here’s a few tips to be financially fit these holidays.
#1 Watch your outgoings
Retail inhibitions go out the window during the silly season: another $19 cocktail at the work Christmas party; a 2–course lunch in-between present shopping in South Yarra; and a $50 pair of sneakers for your 3-year-old nephew.
Before you set out on your shopping crusade, do yourself a favour and download one of these apps selected by our resident Financial Wellness specialist Mikaela. This will help you avoid a holiday hangover.
Beware of impulse purchases. Sit down and give some real thought to what your family and friends want / need for Christmas before you head to the shops. That way you’ll have a better handle on how much you’ll spend.
#2 Bills don’t stop for Christmas
Unfortunately, Christmas cheer doesn’t seem to extend to your mobile phone, gas, electricity and other utility providers. As sure as Santa needs a few cold ones to wash down those cookies on Christmas Eve, there’ll still be end-of-month and quarterly bills showing up in your mailbox.
Examine your average bill payments per utility and make sure you have enough in the kitty to cover them once the Christmas tree comes down.
#3 Beware the ‘retail gateway drug’
Buying-now and paying-later: sounds pretty good, doesn’t it? Think again.
The lure is obvious: walking out of a store with the perfect present for our significant other without having to pay for it straight away. As the sales attendant pops it into a festive bag, we can strut out the door knowing we’re going to nail the gift opening portion of Christmas Day.
Then the come-down kicks-in – successive repayments after 12 days of Christmas spending.
Buy-now, pay-later innovations can be like a gateway drug. Once you conquer the non- interest component of the buy-now, pay-later products, you think about dabbling in the harder stuff. Next thing you know, you have racked up thousands on a credit card, and are using other credit cards to pay down the debt.
Lenders aren’t keen on the buy-now, pay-later system, either. If you can’t wait until the next pay cycle to purchase a pair of shoes, how can you manage the ongoing commitment of a loan?
#4 Leave the credit card at home
Do not walk out the door with 5 credit cards in your purse / wallet. Using cash is a good way to keep on top of spending: once it runs out, it’s time for you to run out, and get back home, on budget.
With credit, a simple wave of the card seems effortless. But once the end of the month comes around, you’ll see the true burden of a credit card.
#5 Take Secret Santa home
Have you ever thought about taking the workplace ‘Secret Santa’ concept – where you buy one present for one co-worker, after pulling their name out of a hat – home?
A lot of people would prefer one thing they really want than numerous things they don’t need: “Ummm, socks … wow.”
It should be more economical buying one present than 5 or more.
#6 Make a Financial Wellness plan
Do you notice all those advertisements on TV during the Boxing Day Test promoting Christmas hampers for the following year? It’s like PAYG festive finance.
Companies launch these products at this time because they know footing the bill for Christmas – food, beverages, presents, decorations – has taken a massive chunk out of December bank statements.
Planning ahead for the most important time of the year makes sense. But why stop at Christmas?
Use 2020 to make a clean start for your financial wellness. The team at Neue Black and Entourage Finance has developed a Financial Wellness program to get you started.
Take control of your finances, today