12 money tips for Christmas

Xmas Gift ImagesHow to have a MoneySmart Christmas

Christmas can be a busy and stressful time of the year arranging gifts, food and decorations, let alone working out how you are going to pay for it all.

In the spirit of the classic hit 'The Twelve Days of Christmas' we have put together 12 money tips to help you enjoy and financially navigate the holiday season.

1. Learn from Christmas past

Before you start Christmas shopping or planning have a think about how you approached it last year and what you might do differently. Did you spend more than you thought you would? Did you feel pressured to create a Christmas beyond your financial means? Try to throw all that off this year and start afresh.

Imagine the stress-free Christmas that you want and work to make that happen.

2. Make a list and check it twice

If you feel you went overboard with spending last year, create a Christmas budget - a list of what you will spend on gifts, food and decorations.

For gifts, it really is the thought that counts and often less is more. Work out what items your friends and family really need or what would mean most to them rather than buying big expensive items for each person.

Christmas budgets really work. Our Christmas spending infographic shows that most people who create a Christmas budget stick to it.

Australia's Christmas spending

Xmas infographic imageTake a look at our Christmas spending infographic, with information on how much Australians spend at Christmas, Christmas budgeting and how long it can take to pay off Christmas credit card debt.

3. Christmas gift hacks

There are various ways you can approach giving at Christmas time. Here are a few ideas from ASIC's MoneySmart Facebook community.

  • Try a Secret Santa arrangement with your family so you only have to buy one gift.
  • Agree to only buy for the kids in your extended family.
  • Buy small gifts to open on Christmas Day and go shopping for a larger gift in the Boxing Day sales when items will be cheaper.
  • Sign up to newsletters from your favourite retailers now, as they'll often email discount codes in the lead-up to Christmas.

4. Plan your shopping

Take the guess work out of gift buying and plan your Christmas shopping. This will really help you avoid overspending.

Researching gifts and comparing prices online will help you work out where you are going to shop and where to get the best deal.

If you are planning on buying gifts online, take a look at our tips on online shopping. Just make sure you leave enough time for the gifts to be delivered before Christmas.

Video: How are you budgeting for Christmas this year?

Video about Christmas spending

We ask people on the street about how they are approaching Christmas budgeting and spending this year.

Transcript: How are you budgeting for Christmas this year?

5. Bill smooth your Christmas

If you lay-by larger gifts a few months before Christmas you can really reduce your December spend. Most large department or chain stores offer lay-by but you'll need to be organised with your gift ideas earlier in the year.

If you have children and are buying toys, the sales are usually in July. If you can work out what you are buying then, you can have the gifts paid off in fortnightly repayments by October.

Some banks offer Christmas club savings accounts that allow you to save over the course of the year and only let you withdraw the money from November onwards. These are good if you need some discipline to save and want to set up automatic savings to go into your Christmas account.

It's not too early to start thinking about Christmas next year!

6. Monitor the plastic

Our Christmas infographic shows that last year around 20% of MoneySmart readers said they paid for Christmas gifts by credit card. If you use a credit card this year to pay for some or all of your Christmas gifts and expenses, make sure you keep track of your spending and have a plan to pay it off.

You can use our credit card calculator to see how long it will take you to pay off your card and how much time and money you'll save by making higher repayments. 

Credit card calculator

Last year people planned to spend $1000 on average on Christmas. If they paid off $100 per month, according to our credit card calculator it would take them a year to pay off this debt.

If you feel you can't trust yourself with a credit card at Christmas, either reduce your credit limit or try to pay for items with cash.

Video: How are you paying for Christmas this year?

Video about Christmas spending

We ask people on the street about their Christmas saving tips and how they are paying for Christmas this year.

Transcript: How are you paying for Christmas this year?

7. Track your spending

Keeping track of your spending is the best way to avoid going over your budget this Christmas.

Use our TrackMySPEND app to nominate a spending limit for different types of Christmas expenses and track your progress while you shop. 


8. Gift cards

Gift cards are a popular present for the family member that has everything and are a winning option for the unimaginative shopper. However, it's important to remind your gift receiver to use the total value of the card by the expiry date, as the remaining amount is usually not refundable. Look for gift cards with a longer valid period that can be used in lots of different places.

Find out more about the pros and cons of gift cards.

9. Kids and Christmas cash

Nine out of 10 Australian children aged between 6-13 received some cash for Christmas last year. Giving kids cash is a great opportunity for them to learn about saving and budgeting for the items they really want. Take a look at our page on teaching kids about money for ways to give life lessons on money.

10. Give meaningful gifts

Great gift giving does not necessarily equate to spending lots of money. It's about knowing what loved ones cherish the most.

Our Facebook followers have given us some great ideas for gifts of time and love:

  • Kids could give parents 50 sessions of dishwashing or laundry, other household chores
  • Give family members babysitting sessions or even lawn mowing
  • Give a friend a day out picnicking at a special location

Charities also have all kinds of personal gifts you can buy for family and friends at Christmas. If your family member is passionate about a particular cause or charity, donating to that charity for Christmas on their behalf can mean a lot. Read our article on donating to find out how to check if a charity is legitimate.

11. Cut Christmas Day food costs

If you are hosting Christmas at your house here a few ideas to save money on Christmas Day:

  • Simplify the menu - You don't need to have all the Christmas trimmings. A simple classic meal can work just as well.
  • Bring a plate - Arrange for everyone to 'bring a plate' so all the family pitches in and splits the cost and the effort. 
  • Buy items now - Buy pantry items for Christmas lunch in the weeks leading up to Christmas so you don't have all the costs at once.

12. Plan for next Christmas

Once this Christmas is done and dusted you should plan ahead for next year. Here are some ideas to help make sure you are set up for next Christmas:

  • Start saving now - Open a high interest savings account in January and contribute a small amount to it every payday. Saving $20 per week will add up to over $1,000 in a year's time. Use our savings goals calculator to see how much you'll need to save each pay.
  • Shop the sales - Shop for presents throughout the year, especially during sales. This will spread your costs and make them more manageable.
  • Layby - Pre-plan larger gifts and layby 3-6 months ahead so you can pay them off over time.

Merry Christmas from ASIC's MoneySmart Team!

Related links

Last updated: 30 May 2016