Your Christmas Financial Blueprint

9 steps to prepare for Christmas and the holidays, now

Another year has nearly flown by, and the first mentions of Christmas are creeping into retail marketing. For many Kiwis that signals unbridled spending, followed by February and March worrying about how to pay-off the holiday period debts.

Summer holidays are meant to be a time for getting together, enjoying the company of family and friends, and having a good time. Unfortunately, it can also be called ‘silly season’ – one of the contributors being spending too much and causing financial stress.

To head this off and ensure you have a great Christmas and summer, try thinking about it this way: you now have a few weeks to get your act together to get through Christmas and the New Year break without a debt headache.

Here’s a collection of nine steps to follow before the arrival of summer holidays.

1. Plan

Leaving your Christmas shopping and other holiday preparations to Christmas Eve is a sure-fire recipe for Christmas angst. Instead, get yourself organised well in advance. This might include:

• Make holiday plans and book holiday travel as early as possible. If you haven’t got to this yet, stop reading to plan and book it right now!
• Make a prioritised list of whatever you need to get done, splitting this between what you “want” to do and what you “need” to do. (Checking accomplished items off any list is satisfying in itself).
• Buying Christmas gifts online can help you stick to your budget, avoid crowded malls at peak times, and more easily compare deals and products.
• If you are ‘hitting the malls’, then plan your trip in advance.
• Request complimentary gift wrapping.
• Consider DIY gifts. A homemade gift can often be more sentimental to the recipient and may save you some money too.
• Set up appropriate travel insurance.

2. Settle on a Buying Policy

Planning for Christmas includes setting policies for gift-giving.

It's practical to get your friends and family to agree to spend-limits on gifts now – it's not practical to do it a week or two before Christmas Day.

Isn’t That Cheap?

No, spend-limits save everyone money, not just you! Especially against the backdrop of New Zealand’s cost of living crisis, your friends and family will probably respond with delight!

3. Reduce Social Media Use

Stay away from the ‘comparison trap’ of social media, especially at holiday time. If you’re comparing your end of year parties, presents, and holiday with everyone else’s perfectly curated online image, you’re probably playing a losing battle.

As the holiday season draws near: take a breath, step back, and relax.

4. Cash Flow Planning

We get it, the word budget doesn’t exactly scream “holiday excitement” – think of it as cash flow planning instead.

Cash flow planning is something that has gone out the window for many families because of easy credit in the form of credit cards, personal loans, and BNPL. But planning for what happens to income every week or fortnight is a powerful way to take control of your finances, especially when it's for a finite project such as a ten-week plan.

No-one wants to start next year with unneeded debt. So, work out a rough budget of expected Christmas costs as early as possible. The budget isn’t just for presents – remember to include the cost of throwing a Christmas Day party, emergency presents, AirBnB or hotel or campsite fees, fuel, food, and taxis or Ubers.

If you’ve made a good estimate of your holiday costs and your cash-flow over the holiday period, you can plan for buying gifts and party supplies on a weekly basis from cash income, now. This is a popular way to do it, judging by how many Christmas-budgeting tools are on the internet: most of them are ready-formatted Excel spread sheets, so anyone can run them on a computer, tablet, or phone.

5. Buy Gifts Now

Do your present-buying early and save cash. For instance, right now there are plenty of sales on – and at current rates of inflation it’s reasonable to assume many prices will have crept higher by Christmas! By starting early, you can also use internet-based retailers and get the lower prices by waiting for non-urgent delivery. When you start early with gift-buying you have the time to find what you want and stick to the plan, not be forced into last-minute purchases that bust your budget.

Party Planning

If you're the one who does Christmas Day hosting, you can get in early and allocate who brings what. It saves you money and lets others contribute.

6. Be Picky, Say No

Many of us do what we do during the holiday season just because we always have, turning the entire month of December into a mad whirl of non-stop holiday preparations, functions, and activities. Get control of your life by eliminating some of these holiday activities and the costs that go with them. For example, if you’re planning a get-together, consider doing it with a few of your closest friends or relatives. You can throw big blowout parties at another time of the year when you and your guests will have fewer commitments competing for your precious time. Each thing you eliminate can help you prioritise what you would rather be doing, including some deserved downtime.

7. Choose Travel-Proof Gifts

For those travelling these holidays, dragging presents through airport security, or packing them in an already-crammed car can be a pain. Instead, try ordering gifts to be delivered, or try using gift cards and small easily transported items.

8. De-clutter

The New Year and Christmas break is a perfect time for the approach of “out with the old and in with the new”. Get rid of the clutter before Christmas gets here. For every new toy that the kids will open on Christmas morning, get rid of two. Make your kids a part of it so they know they’re donating their well-loved toys to other less-fortunate kids. What better time to sort through and organise your clothes, garage, spare spaces, and kitchen? You can throw some out, donate some, and probably sell some for a little extra holiday spending money.

9. Have fun!

After all, what are holidays for?

The Bottom Line: Your Christmas Financial Blueprint

The Christmas holiday period can be a time of financial pressure for many families, but it doesn't have to be. To relieve some of the burden, start early, know your costs, understand your cash-flow, and make a plan.

Then, stick to it.