While it might be the most wonderful time of the year, you don't need to blow your Christmas budget to make it an enjoyable one. And you definitely want to avoid rent arrears!
With a little planning and creativity, it’s not impossible to have an affordable Christmas and ensure you start off the new year on the front foot.
The ongoing cost of living pressures means that many of us are looking for ways to stay out of the red. So, we've put together a list of budgeting ideas worth considering in the lead-up to the festive season.
Here's a sneak peak of our nine Christmas budget-saving tips:
Read on for more!
Generosity for others and buying gifts your loved ones will adore can tempt us to overspend. However, it's important to make sure that you prioritise paying your rent, utility bills and other important financial commitments first.
Let’s start with the obvious. We’re talking rent and utilities at a minimum. You'll also want to have enough money for things like groceries, transport, healthcare, and any debt repayments (e.g. car finance and credit cards).
The easiest way to set aside money for these important expenses would be to set up a separate bank account where money goes as soon as your income lands each week/fortnight/month.
Some people set up separate accounts to create 'buckets' of funds for various expenses as a way of helping them to keep track of each individual budget.
Whether you’re a first-time or seasoned renter, a payment app like RentPay is a great way to manage money for your biggest non-negotiable: your rent payments.
With RentPay, you can sync your payday with your rent due date. You'll receive automated alerts and reminders, so you never miss a payment. On top of helping you to manage rent, you can create a savings buffer to insulate you against unexpected events and build up your credit score while renting.
Top tip: Planning for non-regular expenses is a bit trickier since they don't recur frequently or you're not sure when it needs to happen. Examples are car servicing, or if you pay car or health insurance once annually in a lump sum. These aren't small costs, so make sure you're putting aside money for these ready for use when you need it.
Unfortunately, there are some events in life that we can never anticipate. That's why insurance is a booming industry. However, for costs that insurance doesn't cover, we need to make sure that we have our own insurance policy—an emergency fund.
Unexpected expenses are the type that can blindside you and create a lot of stress. For example, your car breaks down and needs to be towed and repaired. You receive a large tax bill this year. You experience a health issue that means you can't work for a while.
While all the stress related to these situations can't be removed entirely, having an emergency fund in place will certainly help.
Your emergency fund will also save you from carving out money from budgets you've allocated to other things. This means you can avoid maxing out your credit card or needing to apply for a personal loan—both have the potential to put you into bad debt.
As a rough guide, aim to build up at least three to six months' worth of living expenses in your emergency fund for ultimate peace of mind.
Top tip: If you're still building up an emergency fund and want some back-up funds just in case, consider RentPay's optional Scorebuilder feature. This provides access to an approved line of credit and can help to improve your credit score.
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We all know that Christmas rolls around every year, like clockwork. That means it's something we can plan ahead. Knowing how costly the festive season can be, it's definitely more manageable to regularly set aside money throughout the year, compared to stumping up hundreds (or thousands!) of cash in a hurry.
You may not know exactly how much to budget for Christmas until you get closer to the date with more concrete plans. However, you can just estimate what you'll need, then adjust the amount you set aside as required.
If you need to put away $50 a month to meet your Christmas budget for gifts, food or travel, treat it the same way you do your rent and other bills. You wouldn’t spend the money you intended for your rent on a night out with friends, so the same rule should apply.
Consider setting up automated payments, so the money gets moved to your chosen account on payday. Alternatively, some banks let you create personalised savings goals, which can be useful for putting money aside and removing temptation.
Top tip: RentPay's buffer feature could be used as a place to stash cash regularly throughout the year to build up the necessary funds for your Christmas budget and expenses! Or how about planning ahead for a rent-free Christmas?
There's nothing more empowering than writing out a good list and that feeling of satisfaction of when something gets ticked off.
Not only are lists both a useful planning tool and a dopamine boost, they're also very effective at keeping on you track by avoiding any unnecessary spending.
You can make a list for just about anything, but for Christmastime, it's typically all about festive decorations, parties, food and drinks, gift cards and wrap, and the gifts!
When you make a list, you'll be able to set yourself a budget for how much you know it'll cost or what you're able to spend. If you find that something is more expensive than anticipated, re-allocate budgets or find an alternative item. If it's not on the list, then don't buy it at all!
Top tip: Many families and groups of friends agree to set limits on gift budgets, participate in a Secret Santa arrangement (only buying a gift for one person), decide to buy gifts for children only, or prefer to exchange homemade goodies. These are some budget-friendly gifting rules you can discuss ahead of time to reduce how much money is spent on gift-giving. Alternatively, why not challenge each other to find ways to give back to the community?
Cashback sites are considered a smarter way to shop these days. These sites offer a percentage back as cashback, which can help reduce your overall spending. Every cashback site varies in terms of how long it takes them to credit your cashback.
There are also plenty of store rewards and loyalty programs offering discounts and cashbacks. It can be challenging to keep track of which ones you've joined, then you end up forgetting to use them anyway! So, it might be worth being more selective by only signing up to a couple, but be super-focused about making the most from them.
RentPay's shopping rewards partner, Paylab, offers up to 15% off at 140+ top retailers in Australia. Unlike some other shopping rewards and cashback providers, with Paylab you receive instant e-gift cards and the cashback is also instantly credited to your Paylab account. You can put it towards more retail savings or link it to your RentPay account so you can use it towards your rent!
Top tip: Remember that shopping rewards and cashback don't only happen during Christmastime. The savings can really add throughout a whole year of spending. Check out how to use Paylab and how much you could be saving with Paylab.
As the saying goes: the early bird catches the worm. Buying things, like gifts, ahead of time does have it's advantages. Getting your shopping done way ahead of time means that you can avoid the seasonal sales rush, you won't need to worry about something selling out, and you'll have already ticked off some Christmas gift shopping from your to-do list.
Buying gifts early also means you can capitalise on a sale period (e.g. End of Financial Year, Black Friday, Cyber Monday, etc.) and/or spread your Christmas costs throughout the year.
Several large retailers offer the option to place an item on 'lay-by' where the store will hold your item while you make smaller instalments to pay off your purchase in an interest-free arrangement. You collect the item whenever you've eventually paid for the item in full.
Important note: Buy now, pay later (BNPL) providers—like Afterpay, Zip Pay and others—are different to a store lay-by. With these providers, you receive the product immediately and delay the payment, however, while your purchase may be interest-free you'll be charged account fees to use the service. You may also incur late fees and other changes depending on the provider.
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If you don't have quite enough set aside to meet your Christmas budget and you've already shaved back costs as much as you can, then you might need to think about ways to make some quick cash.
Christmas is a busy retail period where stores are often looking for seasonal casual staff to help deal with the additional volume of shoppers.
Otherwise, consider listing yourself on pet minding or pet sitting sites, completing market research online surveys, offering babysitting or childminding services, putting your time and skills to work via an online marketplace, or have a good declutter at home and sell items you no longer need or want.
There are options available if you look hard enough. You may be surprised by how much extra cash you can make—it might even become something you enjoy or decide to continue on an ongoing basis!
We often pride ourselves on throwing the best party, hosting the most sumptuous banquet, or giving the most perfect gifts. However, it can take a toll on us mentally, financially and time-wise. Is the cost of your enjoyment and sanity really worth taking on everything by yourself?
Everyone can appreciate how busy, stressful and expensive the festive season can be, so why not join forces? Whenever there's a planned gathering, go for a potluck arrangement: ask everyone to bring a dish to share or allocate a specific dish. Many hands make light work! It'll make life much easier for whomever is hosting the gathering, as well as being easier on the finances!
When it comes to Christmas gifts, joint gift-giving is also an option. Instead of buying a smaller gift separately, it can make sense to team up and get a larger or more expensive gift—which can also help to share the cost.
When you're completely overwhelmed with spending too much time and money (that you might not actually have to spare), it'll only life more challenging and it's probably unlikely that you'll be enjoying a 'merry' Christmas. Worse, it may even negatively impact your mental and physical health. This is where self-care comes in.
While we all ideally want to make people happy, and be able to help or donate as much as we can, it's important to know your limits. Make sure you set boundaries so you don't overcommit.
For example, if someone's asking for a gift you can't afford this Christmas, see if it can be postponed until the next birthday or Christmas the following year. Or simply be honest or let them know you've already selected a different gift.
If someone's asking for a financial loan, be clear that you'd have loved to help if you could, but have other commitments. But don't leave them to scramble at the very last minute—make sure that you let them know as early as possible.
Christmas and New Year is a time to be enjoyed, making special memories with our loved ones. Don't derail the celebrations with money woes.
With our nine tips, we hope they're useful in helping to take a bit of stress out of the festive lead-up.
Remember to stick to your lists and budgets—and don't be afraid to say 'no'—so you can start a fresh year on a strong financial footing.
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> Top tips to avoid Christmas rent arrears
