Why you need to start financially preparing for Christmas now

Few of us have wads of surplus cash to throw around this Christmas, meaning we'll need to stretch our festive dollar further. With the help of some simple savings tips, you can do exactly that!

This Christmas comes amidst the backdrop of high interest rates, soaring cost of living, ballooning insurance premiums (that we can't afford to scrap in anticipation of a dangerous fire season ahead), and decreased savings.

However, you needn't be Scrooge - an enjoyable Christmas just takes a bit more preparation and carefully targeted spending.

1. Make a plan

There's no better way to blow your budget than buying on impulse. So don't.

Draw up a list of who you need to buy for. Cull that list to who you really need to buy for.

Work out how much you can afford overall, then divide that by your list to calculate your spend per person.

Jot down ideas for what to get each person within this budget. Then shop around for the best possible price. That could be now or at the sales (like Black Friday in November - use past years' pricing as a guide).

This approach not only lets you keep track of your spending, but helps you space out your shopping between now and Christmas.

2. Gift needs, not wants

Giving gifts that people actually need means they don't have to spend the money themselves, while you can be sure your gift isn't wasted.

But that doesn't mean needs can't still be fun or thoughtful.

Does your best friend need help around the house? Why not book them a cleaner?

Do your kids need new clothes? Give them a shopping spree at their favourite store.

Does mum need help in the garden? She might love a trailer load of dirt/compost/mulch and a few plants - plus an extra pair of hands.

3. Embrace self-education

I'm a big believer in giving gifts that help people learn - and not just kids.

When we learn, our minds stay active, we are happier, and we can often use our new-found skills to save money or boost our earnings.

Consider gifting your loved ones an experiential class (e.g. cooking, pottery, improvisation), a year's magazine subscription, or a book from a qualified author.

4. Avoid spending cash

The silver lining of high inflation is you've likely been accruing more points on your credit and store cards. Save your money and spend these instead.

Stretch points as far as possible: look at special offers; see which retailers offer the best points value; exchange them for gift cards instead of cash or goods.

If you're in a real scrape, perhaps you were given gift cards last year that have yet to be used - redeem those to buy presents (no one would suspect!).

5. Join forces

Instead of buying gifts for every single person in the family (plus the office, golf club, mum's group etc), you - and they - will save serious money by joining forces and setting some ground rules.

Why not implement a Secret Santa (or Naughty Santa for some extra festive frivolity!), so everyone gets a present to open plus the added gift of saving money and stress.

Chip in with siblings/friends to buy one large gift, costing each of you less than buying individual presents.

Or simply set a price cap (you'd be surprised how much enjoyment can come from a $5 novelty toy or favourite lollies over a $100 gadget).

6. Be creative

If you have a talent or hobby, put it to work instead of your bank account.

Making your own gifts might be baking Christmas cakes, puddings, and other goodies; artwork, photography, needlework or woodwork.

Alternatively, give your time - a weekend's manual labour or accompany them on a day out.

These gifts are more valuable than anything money could buy anyway.

7. Get charitable

Giving a donation in someone's name can be a great gift - especially for anyone who is notoriously hard to buy for. Many charities have a bespoke 'gift' card to acknowledge the donation.

Choose a charity or cause that means a lot to them - perhaps they are a cancer survivor or are passionate about conservation.

Plus, you can claim a tax deduction for donations over $2 - putting money back in your pocket. Now that is a Merry Christmas to all!

Get stories like this in our newsletters.