Could you save $1361 by Christmas?

While we're still two months out from Christmas you could be forgiven for thinking that the holiday season was much closer given that some retailers have already been rolling out the festive decorations.

Christmas is on the horizon though, and for many households that will mean a period of increased spending on travel, presents, food and much more.

So for those wanting to cover these additional costs with their own money, is it too late to start planning ahead and squirreling away some extra cash?

"It's definitely not too late, because anything that you do now to get organised is going to be helpful," says Sarah Megginson, a money expert at Finder.

Megginson says that the key is to be clear about how much money you're going to need and how you're going to spend it, which means creating a list and sticking to a budget.

"People often end up buying things without knowing who they're buying for, or buying something for their sister even though they've already bought something for her. That type of ad hoc approach is where you end up spending so much more than you need to.

"So the very best thing you can do is have a list and being realistic about what you can afford. That might not be the same as previous Christmases, but that's perfectly okay.

"What you don't want to do is to rack up a heap of debt with a credit card or buy now pay later just so you can buy the same volume of gifts that you did last year."

How much do you need to save?

In the lead-up to Christmas last year research from Finder revealed that Australians were expecting to fork out an average of $1361 during the festive period, while fellow comparison website Savvy put the average Christmas spend at $767.

Naturally, the only number that matters is how much you'll need for your own Christmas budget. So once you've worked that out though, one helpful way to start working towards it is by calculating how much you'll need to save each week or fortnight to achieve that.

For instance, someone looking to save $1361 before December 25 this year would need to put away roughly $170 each week for the next eight weeks. Here are a few more examples:

\Whatever your goal, Megginson says that putting it in the right place should also be an important consideration.

"It doesn't matter if your balance is only $50, if you've got any savings at all sitting in an account you should absolutely have that in a high interest savings account at the moment.

"We've had all these interest rate rises which have been fantastic for anyone who has savings, so it's quite common to be able to get 5% interest or more on your savings at present."

Five tips for smarter Christmas spending

Of course, organisation isn't just about budgeting and saving - it can also pay to think ahead about how and when you'll do your Christmas shopping. With that in mind, here are some tips from Megginson, as well as NAB personal banking executive, Alan Machet.

• Think carefully about gift cards: "Gift cards are always a popular gift choice, but in research we conducted earlier in the year we found that there's a huge amount of unused money on them," Megginson says. "That's either because people lose them or because they're left to expire without being spent."
• Plan ahead with online orders: "Getting in early means you'll have all your shopping done and delivered in plenty of time and many retailers offer cheaper delivery that might take a little longer," Machet recommends.
• Take advantage of Black Friday: "Black Friday sales used to be a bit of a gimmick, but now a lot of retailers will genuinely save up their best promotions during the year for that period," says Megginson. "So it can actually be a fantastic time to do your Christmas shopping and buy things at a discount."
• Make use of your reward points: "Australians have billions of reward points banked up which can be redeemed over the festive season," Machet says. "NAB insights reveal a 120% jump since last year in people choosing to cash in their points for a gift card."

Looking ahead, Megginson recommends that households looking to ease their financial burden at Christmas time next year should start planning as early as they can.

"At the start of next year if you were to set aside $100 from your monthly pay to go towards your Christmas fund, by the time Christmas rolls around you're going to have over $1,000. That will cover most people's spending.

"Starting that early will probably sound ridiculous to some people, but I just think that being able to shop for Christmas without the financial pressure is such a great gift."

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