Diana Clement: Plan ahead to avoid Christmas debt blues

It's December 1 and I'm well into the Christmas swing. My daughter was an elf on the New Zealand Herald float at the Farmers' Santa Parade and I'm starting to think about the inevitable seasonal purchases we make in December.

Kiwis' spending is already building, according to Paymark, which processes about 75 per cent of electronic payments in New Zealand. "Typically we see spending build momentum from mid-November," says Paymark head of sales and marketing Paul Whiston. Paymark expects we'll spend more than $4.6 billion on plastic this month.

The biggest spending increases during December are at department stores, followed by recreational goods shops and appliance outlets. All three can take up to 75 per cent more at the till in December than the average of the previous 11 months, says Whiston.

Those people who want to buck the trend and avoid the financial excesses of the holiday season need to get their planning under way. Here are some tips:

Write a list. Giving is a zero sum game. You will tend to spend the same as is spent on you. So why not get something you actually want, not some silly joke present. We have written lists of what we actually want for Christmas. I'm never embarrassed to ask questions such as: "What would you like that you probably wouldn't buy yourself?", or "What would you like that you never get around to buying?". I will also write a list of the food and ingredients needed for our traditional Christmas dinner. It's all too easy to go to the supermarket and buy unnecessary food. People who write lists and stick to them will find Christmas shopping easier, cheaper, and faster. There are some useful templates on this site: tinyurl.com/christmasplanner. I especially liked the Holiday Values Worksheet, which asks all sorts of questions, such as, "What went well last year?" and "Were ... gift-buying decisions influenced by competitiveness or insecurity?".

Give up giving. I'm no Scrooge, but do we really need to give Christmas gifts outside the immediate family? There is a certain joy in giving to children. But does everyone else really need lots of parcels under the tree? Spending money isn't the only way of showing someone you love them. Let's cut the ties of feeling that we need to reciprocate gifts.

Track Christmas spending. Use a smartphone spending log or a notebook and keep a tally of how much you've spent on Christmas-related gifts, food, entertainment and treats for yourself. A running tally is a real eye-opener.

Keep stocking fillers under control. Kids these days expect Christmas stockings filled with gifts as well as the presents under the tree. Last year I decided that instead of useless $2 shop gifts I was only going to put consumables and recycled gifts in the stockings. I'm partial to school fairs and garage sales and have picked up all sorts of items for a song. Last weekend I snapped up several factory-sealed packs of Diva items for 50c each at a local garage sale. The young woman whose sale it was had worked at the jewellery chain. The same thing happened earlier in the year with some unopened soaps from Lush.

Swaps. Find a family with the same age kids as yours and swap items that your kids don't use. They'll be "new" to the recipient, can make great stocking fillers and help to declutter your house before the next wave of Christmas junk comes your way.

Handmade. Lovingly homemade gifts are often much appreciated by the receiver. You don't need to be a craft expert or celebrity chef to make something beautiful at Christmas. Do, however, adhere to the rule of thinking about the person you're giving to. Does he or she actually eat jam? Are they on a diet? Are they going away on a two-week holiday on Boxing Day and can't take your gift with them? Top off a handmade gift with individual wrapping. Children's artwork, unused wallpaper cut-offs, or hand-painted brown paper wrapped with ribbons are more special than cheap supermarket wrapping paper. Your creative wrapping becomes part of the gift.

Recycled gifts. I often wonder why it's so embarrassing for people to buy or give secondhand items. Yet we're quite happy to buy antiques, secondhand cars, secondhand houses and so on. Gift-giving can be cheap or thoughtful whether the item is new or recycled. A couple of years back I wrapped a book from my bookshelf and gave it to a friend who had often admired it. It meant more to the receiver than it did to me. If it was any old book it might have been seen as being cheap. The fact that it had been the inspiration of many discussions made it a charming gift.

Avoid gift stores. Why do people buy knick-knacks for others who simply won't use them? "Gifts" are lazy purchases where the giver isn't putting any thought into what the receiver might want. We've all received such a gift. For me it's the pre-packed, mass-produced toiletries that every second shop sells at Christmas. I don't use such things whether or not they're in a beautiful gift box. Someone who asked would find out exactly what brand I liked and spend the same money more wisely. What's more, by buying items sold as "gifts" you might even be forcing the receiver to put items they don't like out on display out of some feeling of obligation to you. I'd hate to do that to someone.

Understand the psychology. I've struggled to understand why certain people have to give gifts all the time - even when you ask them not to. Bingo. The answer came when I was interviewing someone earlier this year and he talked about the book The Five Love Languages. Some people express their love by giving gifts. There are also those whose main "love language" is receiving gifts. Understanding the psychology of gift-giving can help in planning for Christmas. I wrote about this last Christmas. The full article can be found at: tinyurl.com/psychologyofgiving. Understanding more about why people give is useful at Christmas time and might overcome the awkwardness that can arise in giving and receiving gifts.

Beware of self-gifting. The big trend in the United States this year is self-gifting. According to Time magazine, retailers in the United States have seen a 27 per cent jump in five years of Christmas shoppers spending money on themselves. It happens here as well. According to Paymark we don't just spend extra at The Warehouse and other high street stores at Christmas. We also spend more on ourselves at the gym, and even the dentist. The US survey found that more than 20 per cent of money in the spending kitty was expected to be self-designated this year. Often shoppers think that a penny saved is a penny they can spend on themselves. If they find Aunty Mavis' present on sale, they use the money saved to buy something special for themselves. This is fine providing it is kept in check.

Regift. Giving unwanted goods to more appropriate people is a much better American tradition for us to adopt. Take a look at what you were given last year or in previous years, think who might like it better than you (and be honest here), wrap it up and give it away. This is really great for those secret Santa presents - although if I was being honest I would suggest it's better to do some research and buy a secret Santa present that your colleague would actually like, use or eat. I personally am never offended if anything I give someone is regifted. I would rather it is used by someone who actually likes it.

Give practical gifts. If you can't surprise someone with a really thoughtful present, at least give something practical and useful.

Set a dollar limit per person. This will help you shop creatively for your loved ones and not overspend.

Give educational gifts. Consider giving an Oxfam goat to your children. Or a financial gift they can learn from - such as shares in a company that they recognise.