That time of the year has arrived once again, and it's all about how we can best negotiate a wonderful festive season and still remain financially secure for when January arrives.
We’ve compiled essential pointers to guarantee a wonderful holiday season without breaking the bank. From buying Christmas gifts on a budget, to sharing the catering bill, these simple ideas will have you financially savvy when December arrives.
If the holiday season makes you a little uneasy and you start mentally adding up extra costs, such as gifts, vacations, and groceries, you may need a festive financial plan to help you manage how and when to spend. The key is to resist decisions that could get you into tight financial situations.
As the phrase goes, “preparation is everything’’. Saving money for Christmas becomes less daunting if you are organised and aware of all your possibilities. However, it is always easier said than done and all we can do is try to be more prepared if any financial problems come our way.
Now let's explore what might truly help us manage Christmas on a budget, as well as how practical holiday living can help us get through one of the most expensive months of the year. Large meal gatherings and buying gifts are the two Christmas traditions that always cost the most, so today you’ll learn practical ways to navigate these financial challenges without being a penny pincher.
Festive Savings and getting our Savings Right
- Is there still time to save for the festive Season?
In simple words, ‘’it's never too late’’, start as soon as you can and make the most of your savings before the holiday season really gets going. Saving whenever you can and contributing to your festive savings pocket is always the best way to avoid the festive season hangover before January arrives.
- Revise your Insurance Policies
This may appear surprising given that it falls under Festive Savings. If you have life insurance, funeral insurance, accident insurance, housing insurance, and so on. Try to make certain you understand exactly what is covered. Perhaps also review your insurance prices before the new year to determine what you are insured for and whether you can save money on any additional charges, as well as whether the policy agreement’s monthly rates can be challenged. Many of us may go on vacation over the December holidays, spend less time at home, and naturally spend a little more being out and about. So, if there is a policy or insurance that could help in the event of an accident, it's always a good idea to double-check what you're covered for.
- The pressure to overspend
The pressure to overspend is stronger than ever at Christmas, especially with the simplicity of online shopping and feeling the need to buy gifts for the people who are special to us. Always try to resist the urge to impulse shop, keep your budget in mind and have the patience to hunt for low cost Christmas gifts that are still thoughtful.
- It all starts in January
A great way to ensure you have a festive savings pocket is to start saving in January, setting aside a specific amount monthly. This amount could be calculated in conjunction with your monthly budget. Take Wonga’s 52 week saving challenge this January and by the time Christmas arrives you will likely be in a much less stressful financial position.
- The first step is to create a yearly budget
To help you determine how much money you have available for gifts, party food, entertainment, etc, you can work through the free budgeting course at Wonga’s Money Academy. When estimating how much money you'll have left over after your regular monthly expenses, try to be realistic and keep your bank statements handy. Furthermore, avoid overestimation by not including the amount you expect to receive from a 13th check or annual bonus; if you are fortunate enough to receive one. For your convenience you can download Wonga’s monthly budget template here and adjust it to your personal needs as you require.
- Use technology to help you save
Saving for Christmas in small, weekly increments is the key to success. Automating your savings process is a terrific way to save in a more routine manner. Check out our list of top finance apps that make your life easier to discover a list of saving and investing tools that will work for you in the background.
- Whenever you can, save for yourself
Try to set aside some money from each paycheck to cover any unforeseen financial emergencies, this could be a medical emergency or a significant car repair, in addition to saving for the holiday season.
- Vacations and our vehicles
Your Xmas budget may be strained due to unexpected car trouble. It is always a good idea to service your car before a trip if possible. Given South Africa's alarmingly high rate of traffic accidents, it may also be a good idea to consider getting accident insurance, which will pay for costs not covered by your medical plan and may cover a variety of costs in the event of an accident. This insurance is reasonably priced, and no medical underwriting is required.
Buying Christmas gifts on a budget
When we are on our way to see family or friends, there is always another question on our minds, and we all know that question is whether or not we should buy a gift for the people we are about to see. Here are some great ideas for buying gifts on a tight budget, stretching your money further, and coming up with more unique budget gift ideas. So, without further ado, let's talk about how we can best negotiate your Christmas gift shopping on a budget.
- Purchasing Gifts in Advance
It's easier to shop for Christmas presents on a budget when you start shopping with plenty of time before the big day. Shopping throughout the year and looking for special offers is a smart way to find great deals on gifts and assist in saving the buck.
- Online price comparisons
Doing price comparisons online is a convenient way to do checks from the comfort of your home. Finding the price and store you wish to purchase from also assists in time saving, also cost saving, limiting potential for overspending by window shopping. Shopping online or price shopping can also save on transport costs and stressful shopping centres packed over the holiday season. Takealot.com: Online Shopping has grown to be one of SA’s premier online shopping websites, helping you compare diverse products and prices.
- When money is tight, buying gifts can be stressful
Saving money for Christmas can be tough at times. Set a price limit for gifts with your family so that no one has a reason to overspend. Be honest with them about the need to cut back on expenditures. Little kids may desire the latest and greatest toys, but versatile and engaging educational toys can engage young minds without breaking the bank. Look for inexpensive gifts that encourage imaginative play, motor skill development, cultural knowledge, and language growth. These could include books, puzzles and other items that challenge the mind.
- Consider making your own gifts
Gifts may be as much pleasure to make as they are to give. There are endless ideas for Christmas gifts on a budget that accommodate all ranges of skill and creativity. Biscuits, cookies, baked goods, jams, chutneys, and good ol’ Biltong and other african inspired condiments, handcrafted clothing items and accessories, ceramics, woodwork, and all sorts of arts and crafts. What distinguishes these gifts is their individuality, with each one lovingly personalised to the receiver. This list of homemade Christmas gift ideas will inspire you to create with your hands and heart and show your family and friends your creative talents.
- What about a Secret Santa
The holiday spirit can still be spread while conserving money with games like Secret Santa. This is a tradition in which members of a group or community are randomly assigned a gift participant. The gift giver's identity should be kept private and not revealed. This is a great way to avoid overspending while still spreading holiday cheer.
The most important thing is the time spent with family, therefore you don't need to buy gifts for every member of the family. Splitting the gifts and only buying for one specific person is a great way not to overspend. A great place to find Xmas gifts on a budget under R100 is this list from Citizen. Shopping together with friends or family is also a great way to get free delivery when you shop over a certain amount.
- Only gifts for the kids
Another fantastic way to keep spending to a minimum when buying gifts on a budget is to buy for the kids of the family. This could be a discussion and agreement between all adults in a family.
- Choose quality time over spending on gifts
Quality time over everything else is one of the best ways to let everyone know how special they are to us. Make your time together extra special by having a fun game or challenge prepared for the group to enjoy.
Controlling how we spend
- Resist advertising pressure
This is always one of the most difficult challenges for many of us, especially during the Christmas season. There are countless marketing channels aimed at getting us to spend more money. It is entirely up to each and every one of us to avoid overspending and to resist being sucked into too many marketing and sales schemes. Easier said than done but often setting a hard limit on our festive spend can be a great way to know when we have reached our own personal spending limit.
- Tracking how we spend
Tracking how we spend is a good way to help us be financially savvy throughout December into January. It could be a valuable and simple way to maintain a tighter grip on what and how we spend. This could be practising caution on the food we buy, money we spend on fuel and get-togethers.
- Share the Catering bill
Better known as a potluck party where everyone brings a dish to share. If you've been invited to a potluck, bring your famous macaroni and cheese or prepare whatever dish you know your family and friends will enjoy. When all of the food and drinks responsibility falls on one person, get-togethers can quickly become expensive. Arranging a potluck is a great way to keep costs to a minimum. The rule of thumb also states that the person hosting the event should not be required to cook. It's also a good idea to encourage family and friends to bring their own beverages.
Here are some fantastic potluck recipe ideas. Each guest can be assigned a starter, main or dessert to ensure all bases are covered. This is a great way to get together, have some festive fun and still save while you do it. Get-togethers are one of the highest expenses through the festive season, and sharing the catering is a great way to control how we spend on food and social events.
- Stock up in advance
Stocking up on non-perishable foods ahead of time is another option to decrease the expense of a pre-25 December "big shop." Instead of incurring a large bill closer to the holiday, consider adding one or two items to your weekly shopping list in the weeks preceding it. You may purchase things on sale, such as tin foods, chocolates, and any other non-perishable items and food that can readily freeze,that may be used during the month of December, especially when you find them discounted; just make sure to check use-by dates to avoid wasting your money.
- Don't be afraid to talk Money
If you really want to buy a present for someone who always gives you one in return, have an open talk about what you can afford and how much you are willing to spend this year. There's nothing worse than feeling obligated to buy an expensive gift because you always get one, so set a limit and stick to it - it might make you both think more creatively about the gifts you give one another.
- Make a list and check it twice
It's tempting to get carried away at Christmas, buying presents unprepared. To avoid this, figure out how much you can afford to spend this year and then divide it into the items you'll buy, such as presents, meals, and travel. Set a budget for each thing you need to buy and adhere to it to avoid financial stress during the holidays and beyond. Do this ahead of time to help you prioritise the things that are most important to you and your family.
You can download our Christmas Excel budget planner below for a detailed breakdown of typical holiday expenses to help you manage this.
Many South Africans put in long hours throughout the year and look forward to December as a time to relax and truly recover after a hectic 365 days. If your finances aren't where you would like them to be, December may be a stressful month that makes it difficult to unwind and enjoy your vacation with family and friends.
At Wonga we notice a tangible increase in the amount of loan applications throughout the holiday season. We recommend checking out our quick loan guide for tips on how to improve your chances of being approved for a quick loan.
Despite the fact that it is not always simple, making some positive budgeting and planning changes ahead of time can help you have a less stressful December and more stable finances to make it through January and give you a great start to the New Year.