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As the festive season approaches, anticipation of Christmas is often accompanied by another feeling: stress over the finances. We all want to make this time of year special for our loved ones, but too often, that results in overspending, post-holiday debt and purchases that quickly lose their lustre.
This year, turn the tide and embrace a new approach: sensible shopping and budgeting. Here’s how you can spend your money wisely by taking a more investment focus to your shopping and opting for gifts and purchases that offer long-lasting value and happiness.
1. Start with a realistic budget
The foundation of sensible Christmas shopping is creating a budget that aligns with your financial situation. Set a total amount you’re comfortable spending this holiday season, considering all costs—not just gifts, but also food, decorations, travel and any other festive extras. Once you have that figure, break it down into specific categories. For example: Gifts 25%; food & drink 20%; travel& experiences 40%; miscellaneous (decorations, wrapping paper, etc.) 5%; and the emergency fund (unexpected expenses) 10%.
Sticking to a budget not only helps you manage your expenses but also allows you to focus on buying items of better quality rather than falling into the trap of excessive quantity.
2. Embrace the idea of investment gifts
An investment gift is something that brings long-term value. It doesn’t mean you have to spend a fortune; rather, it’s about choosing items that are built to last, offer meaningful experiences or contribute positively to the recipient’s life. Here are a few ideas:
- Quality over quantity: Opt for well-made clothing, cookware or home items that are built to last. For example, a good cast-iron skillet may be more useful than a trendy kitchen gadget that wears out in a few months.
- Educational gifts: Books, online courses, or subscriptions to learning platforms or quality online publications can be gifts that keep on giving. They encourage personal growth and new skills and are an investment in the future.
- Services: Gift your time; babysitting services, lawn mowing, maintenance, a home-cooked dinner.
- Experiences: My favourite – instead of material goods, consider gifting experiences such as a family trip, cooking classes or membership to a local attraction. These gifts are usually far more memorable than material gifts.
3. Shop local and support Kiwi businesses
Christmas is a perfect time to support local businesses and craftspeople. By shopping locally, you not only contribute to the economy, but also often receive better quality and more unique items. Shopping local often results in gifts that have a story behind them and have more meaning.
4. Be wary of sale fever
As tempting as it can be to dive into sales, be wary of getting caught up in sale fever. Discounts can be a great way to save money, but they can also encourage impulse buying. Before buying anything on sale, ask yourself:
- Is this something the recipient really needs or will use?
- Is it within my budget?
- Would I buy it if it weren’t on sale?
A good rule of thumb is to make a list of potential gifts before hitting the sales. This way, you’re not swayed by flashy discounts but instead focused on finding value for money.
5. Plan ahead to avoid last-minute panic buys
Last-minute shopping is often where budgets go pear shaped. The rush leads to frantic, expensive purchases, often without much thought about quality or relevance. Planning your Christmas shopping in advance helps spread costs over time, allows you to compare prices, and gives you the luxury of choosing meaningful, lasting gifts.
6. Consider sustainable options
Sustainability is another form of investment buying. Opt for gifts made from sustainable materials, items that promote less waste (such as reusable water bottles or beeswax wraps), or products from companies committed to environmentally friendly practices. You’ll not only give a meaningful gift but also contribute to a greener planet.
7. Use cashback rewards or loyalty points
If you have cashback rewards or loyalty points accumulated throughout the year, now is a good time to use them. Many credit cards and loyalty programmes allow you to redeem points for gift cards or products, helping you stretch your budget further.
8. DIY gifts:
Handmade gifts can be more thoughtful and cost-effective. Whether it’s homemade jams, baked goods, or personalised crafts, these gifts often carry a lot of sentiment. They’re also a way to control your budget while still giving something meaningful.
9. Avoid gift overload for kids
Christmas is often the most magical time for kids, but it can quickly turn into a materialistic frenzy. Rather than overwhelming children with a bonanza, choose one or two more useful gifts.
10. Review your spending after Christmas
Once the holiday rush is over, take some time to review your spending. Did you stick to your budget? Which gifts were the best received? Reflecting on what worked and what didn’t will help you make even wiser decisions next year.
At the end of the day, Christmas isn’t about how much you spend; it’s about the joy of giving and the time spent with loved ones. By embracing planning and sensible budgeting you will not only save money but create a more meaningful and memorable holiday season for everyone.
Lisa Dudson is an investor, entrepreneur and author of eight bestselling personal finance and property investment books. She has been a media commentator on financial issues for more than 20 years and is known for pragmatic, meaningful and easy-to-understand financial advice. She is a director and shareholder of Saturn Advice and National Capital and provides financial and property advice through her consulting business www.acumen.co.nz
Lisa’s advice is of a general nature, and she is not responsible for any loss that readers may suffer from following it. She cannot correspond directly with readers or give financial advice.
