Opinion
Six tips to save you from a financial hangover this Christmas
Victoria Devine
Money columnistIt may be the most wonderful time of the year, but Christmas, which is just around the corner, can also be the most expensive for many of us.
Yes, there are the obvious expenses: presents, catering, travel expenses. But there are also a million other little hidden costs that are so easy to forget about, and that can quickly amount to a very unhappy credit card bill or hit to the savings account come January 1.
Once you tally up the cost of presents, lunch, travel and alcohol, Christmas quickly gets expensive.Credit: iStock
And that, my friends, is no way to start a new year. Thankfully, much of this problem is avoidable. Enter the unique monthly budget.
If you’re not already doing a unique budget for every month, don’t worry – new habits are easy to start, even at the end of the year. The benefits of doing a unique budget for every month are many, and the downsides are zero. If you are already creating and updating a monthly budget, gold star!
Whichever camp you fall into, here are some unique December considerations to add.
1. Prioritise the basics. Whether it’s April or December, the first and most important things to budget for are your essentials: mortgage repayments or rent, car loans or other loan repayments, public transport or petrol costs, groceries, and any other committed expenses such as gym memberships, subscription services, insurances, utility bills and registrations.
If you’re trying to save or find extra money this month, giving up the party punch is an obvious option.
Once all of these are considered, you’ll know how much you have left over (MoneySmart has a free and very handy budget guide) for any given month, which can then be budgeted into things like emergency savings or a holiday fund.
2. Plan for the big stuff. If you don’t already have money put aside for Christmas presents, now is the time to allocate a set amount for that.
Earlier this month, I spoke about the growing number of people planning to go into debt over Christmas spending this year, and why that should be avoided at all costs. And it bears repeating – spending less will be infinitely better not just for you, but also your children and loved ones in the long term.
Stick to spending only what you can afford - no one will judge you or think you’re a bad person if they don’t get every single item on their present wish list. Other considerations for this month’s budget should also be allocating extra money for groceries (Christmas lunch, anyone?) and any related travel you might be doing to visit family and friends in different parts of the country or state.
3. Take out your diary. Not only is December notorious for being one of the most expensive months of the year, it’s also one of the busiest.
With that in mind, knowing where your weekends will be spent will help with financial planning. Do you have any school events you need to cater for, or are you buying your children’s teacher a gift?
Is there a work Christmas party that you need to pay for, or budget in for Ubers or taxis? Are you planning to have a Christmas catch-up with friends or extended family before Christmas Day?
These are the kinds of “small spends” that we tell ourselves aren’t worth budgeting for but then quickly add up and make us feel sick when we check our balances at the end of the month.
4. Use your December Sundays wisely. Because of the busyness of December, it’s so easy to fall out of our usual routines. A perfect example of this is not keeping up with habits we’d usually be great at during other times, like doing meal prep or one big batch meal for the freezer that comes in handy for midweek dinners when we can’t be bothered cooking.
Sure, this might not be the most exciting task or seem like a big money saver, but according to Canstar Blue, in 2023, the average Australian spent $60 per week on food delivery services.
Taking inflation into consideration, this is likely to have climbed even higher in 2024. But based on last year’s figure alone, if you were to forgo having food delivered just for the month of December, that’s a saving of $240 per person per household, just in exchange for an hour or two’s work on the weekend. By any measure, that’s an exceptional hourly rate of pay.
5. Try going dry. This suggestion might feel sacrilegious to some people, but as the number of Australians either not drinking at all or joining the sober-curious movement continues to grow, there’s never been a better time to take a break from alcohol and not be inundated with questions.
And if you’re trying to save or find extra money this month, giving up the party punch is an obvious option. According to data from the Australian Bureau of Statistics, the average household spent $53 per week on alcohol in 2023.
Don’t forget about New Year’s Eve when it comes to your December budget.Credit: Michael Valdez
Bear in mind that’s the national average and the annual average. For most people who do drink, even just socially, in December it would be much more than this. But, similar to abstaining from food delivery services, taking a month off alcohol will save over $200 per person for the month.
And if you factor in things like being able to drive to events instead of relying on taxis or Ubers, the savings could be even higher.
6. Don’t forget New Year’s Eve. Whether you love a midnight countdown or are entirely indifferent to it, almost everybody forgets about New Year’s Eve when doing their December budget. And hey, given how busy the three weeks leading up to Christmas are, that’s not surprising.
Frankly, making it past that point alone is a big win. But even if you’re having a backyard barbeque with some friends, sharing a bottle of champagne on the pier, or attending a three-day camping festival, budgeting for your plans will help you be more aware of your finances and wake up in the new year with a sense of financial certainty and control.
To me, that sure beats waking up with a raging hangover and wondering where all of your money went.
Victoria Devine is an award-winning retired financial adviser, bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. Victoria is also founder and co-director of Zella Money.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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