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This article is part of the ME Financial Literacy Series. Always read the PDS before undertaking a contract or making a change to your finances. This article is general advice only.
The festive season brings fun, joy and celebration. And we could all do with plenty of that in 2020!
Christmas can also mean splashing the cash – although this year could be different. Research by industry super fund-owned ME Bank shows 77% of Australians are taking a more cautious approach to spending during the pandemic.
Claudio Mazzarella, ME’s General Manager Personal Banking, says, “It’s important to manage our spending carefully during uncertain times. COVID has definitely highlighted the value of having some rainy-day savings.”
The good news is, you can make your Christmas sparkle without racking up a sleigh-load of bills.
Follow Santa’s lead – make a list
Draw up a Christmas budget. “Allocate sensible amounts for presents plus all the trimmings like food and drinks,” Claudio says. “That way it’s easy to plan ahead for festive spending.”
Are your gifts naughty or nice?
It may be the thought that counts, but think twice about spending on unwanted presents. Three in 10 Australians receive gifts they don’t want – that’s an estimated $980 million spent on items likely to be binned, according to research by The Australia Institute.
“Aim for gifts that will be truly valued. Or pool your money with friends and family to purchase quality rather than quantity,” Claudio says. “Remember, gifts don’t have to be expensive to be meaningful.”
Try a secret Santa
Maybe 2020 could be the year to try a Kris Kringle or secret Santa. It’s easy. Family members chip in a set amount and buy just one surprise gift for each person, rather than everyone spending on lots of different presents.
Talk turkey about lunch
“ME research shows a family get-together is high on everyone’s wish list once COVID restrictions end,” says Claudio. “So it looks like this year’s Christmas lunch is going to be big!”
[According to ME’s latest COVID-19 Financial Sentiment and Spending Survey, of those Australians who do intend to spend once all pandemic restrictions have lifted, the equal-third top spending activity they were planning was ‘arranging a meal with the whole family’.]
For a festive feast that won’t starve your bank account, consider asking guests to bring their favourite dish. People love to contribute, and it’s a chance for Auntie Edna to showcase her Christmas pud, or to sample Uncle Andy’s knock-out roast spuds.
Skip the North Pole, think local
Santa may be happy to criss-cross the globe but there are good reasons for the rest of us to shop closer to home. Claudio explains: “ME found nine out of ten Australians want to support businesses impacted by the pandemic. A great way to do this is by shopping at local small businesses.”
Buying local also means saving on transport costs – and specialty stores often provide free gift wrapping.
Make memories – not bills
Aim to steadily stock up on Christmas buys, and avoid a last minute dash which can mean splurging unnecessarily. Think about how you pay too. Options like buy now, pay later often see us spend more than if we use cash or a debit card.
Claudio says: “Making it through the festive season without draining your savings or loading up on bills that fall due in January, is one of the best presents you can give yourself this Christmas.”
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