How to budget for Christmas like a finance expert


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The idea of financial planning is about using what you have in order to enjoy life now and in the future, and the strategies geared towards building wealth to fund your retirement can also apply to your annual Christmas splurge.

With Aussies gearing up to spend $9.77 billion on Christmas gifts alone, it's an expensive time of the year.

So, how can you prepare to make sure you get a visit from Santa instead of the repo guy?


Make a list of all the people you need to buy presents for, plus travel costs, food, alcohol and decorating, and decide on a reasonable amount that you want to spend in total.

Divide this by the number of pay cycles you will have before next Christmas.

Then start saving.

Be strict

Once you have decided on your spending limit per person, honour it.

If you've budgeted $50 for a present, stick to it. If you go over, spend less on the next person to balance your Christmas budget.

Ditch the credit card

Credit cards can be seen as a convenient way to buy things now and pay them off, but you effectively end up spending more with the addition of interest.

So if you're putting it on plastic, look at the price and add at least 20% to that price.

While you may have found a bargain for $50, it's not so much of a bargain when you end up paying $60 in in the new year.

Australians currently have almost $32 billion in credit card debt, with an annual interest cost of around $5.5 billion.

With a good chunk of the $9.77 billion from Christmas shopping to be added to that shortly, these interest costs will only rise. If you can't afford it now, you won't be able to afford it later when interest is applied.

Shop around

While a trip to the local shopping centre can be a good one-stop-shop to get things done, it can also be expensive. Shop around and look online to ensure you're getting the best deal.

But most of all, don't spend beyond your means!

Christmas is a time of fun, family and enjoyment, not financial stress.

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Jenny Brown is the founder and CEO of JBS Financial Strategists.