Research shows that over a quarter of people go into debt over the December holidays. Approximately 20% of people will likely carry a credit card balance into the new year. Do you often start out with good intentions then before you know it, your budget has spiralled out of control? For some, checking their balance might not even be an option before new year, lest they may spontaneously combust from the lack of funds to cover the parties, gifts, decorations, travel, etc. etc.! It’s one thing to keep a spreadsheet or list with gifts and amounts, but does that account for all the ‘extras’ at this time of year – staff parties, extra food and drinks, more socialising etc.?
That’s on top of ‘normal’ life – if one of your tyres blows out or the washing machine breaks, you’re screwed. This anxiety, even if you keep it at bay with the endless festive distractions, will bubble under the surface and make you feel out of control, even as you sign up for another Secret Santa and help yourself to another canopé at the work do. So, will we all just ruin our saving and budgeting efforts for the sake of one month? NO! There is a way to enjoy the festivities, spend without regret and not break your budget… how, you ask? Download the FREE 30-day holiday savings challenge and read about how to implement the quick and easy ideas below to save yourself up to $1000 this holiday season.
Seasons Savings!
Most people have the problem of overspending at this time of year, so let’s start with saving tips.
- Firstly, download the FREE 30-day savings challenge which gives loads of quick and easy-to-implement strategies to help you stay under budget this holiday. Colour them or tick them as you complete them to keep yourself accountable and even better, post on social media (tag @leapsavvysavers) as nothing beats public accountability!
- Make a list of people you want to buy gifts for and check it twice (!) – are they all necessary? Could you chat with friends and family about gifting time or having a spending limit for gifts? Possibly arrange a day out with each other, which surely would be so much more memorable to all involved than yet another toiletries set or pair of socks! You might find that people are relieved to cross you off their list…
- For those people you do want to purchase gifts for, make sure you give plenty of time to buy and shop around for the best deal. Check apps such as Groupon and Smiles to make sure you’re not overspending on the items.
- Have a gift rule for children – stick to 4 gifts for example – one to read, one to wear, one they need and one for flair! Shop around for gently used children’s stuff – it is new for them on Christmas morning, even if it isn’t newly purchased.
- Prepare beforehand by cutting back on spending categories in September, October, November and even the first few weeks of December. You could try a meat-free month or cooking from your pantry for a week. For more detail on how to save big on your grocery budget, see this blog post, and for practical tips on how to cut back on your food budget, download the FREE 5 step savings challenge.
Blessed Budgeting!
Creating an additional budget for this season is imperative for your financial success as there will be so many ‘extras’ not usually covered in your budget. I have just the budget template for you; the formulas are all ready-made and customisable categories created – just plug in your budget and record your expenditure to ensure you stay on target.
- Start by writing down your values and goals for the holiday season – what is important for you to do and achieve this year? Is it spending time with people? Hosting a memorable Christmas day at your house? Making sure you treat your best friends? If you write down what exactly you want to get out of the day, the budgeting will be easier and smoother.
- Next, review your finances, cash flow, savings and income and decide on a hard limit – what is the number you absolutely can’t surpass? Everyone will be different here – it may be that you also want to invest as you don’t want to break your regular investing routine, or perhaps you want to avoid carrying a credit card balance… you have to make the call, with your spouse or family if applicable.
- Once you’ve got your hard limit, plug it into the top of the holiday spreadsheet. Then create categories – write them in order of importance to you; for example, if lavish gifts are your thing, list them first, or alternatively, if you want the finest food, start with your food categories.
- Now it’s time to allocate money to each category. If you’re using my spreadsheet, you’ll see the total populating under your hard limit and the percentage plus dollar/dirham amount you have left and how close you are to your hard limit.
- Finally, start spending and enjoying yourself! There are two methods for tracking – the first is to use a credit card for your expenses (if you aren’t tempted to go over budget and can use a credit card responsibly and pay it off in full at the end of the month) and record them on my budget spreadsheet as you go to ensure you don’t go overbudget. This is an easy exercise and can be done with a glass of wine and Christmas special quite easily. The second is to withdraw the cash and stuff envelopes with your budgeted amounts. Don’t take your credit cards anywhere and boom! You can’t go overbudget!
My present to you: planning and preparation tips!
Like with most things in life, some careful and considered planning and preparation can help avoid major catastrophes and curb a lot of impulsive behaviours that might lead to getting a little too merry with your credit card! If you’re reading this close to Christmas, don’t despair… any sort of planning helps, even if it is last-minute!
- Firstly, go to your internet bank and open a savings account if you haven’t already. Look at your total hard spend, add 5%, and divide that number by 12. Set up an automatic transfer into this account for that amount every payday. You have now bought yourself a stress-free holiday season for next year by setting up a sinking fund (financially at least, I can’t prevent your in-laws from visiting!).
- Take a calendar and start planning in activities and events. Aim to include as many free and frugal activities as you can – for example, could you visit people or have them visit you for drinks rather than go out? It works out cheaper and you’ll probably enjoy it more anyway!
- Plan some frugal self-care activities. We all know the holidays can be stressful – all that forced festive fun and visiting can actually be exhausting. To avoid spending when you feel stress, plan ahead for a night in alone to have a bubble bath and do a pedicure or go for a long walk on your own or with your other half, just to decompress. It doesn’t have to be go, go, go all the time – it is called ‘holidays’ after all.
- Declutter and sell before you buy. Take some time (preferably around Black Friday and Cyber Monday when you may be tempted to make unnecessary purchases) to go through what you already have and make room for the new year. It’s nice to do this before you put up the Christmas decorations if you celebrate, as you will be decorating a fresh, decluttered environment rather than piling clutter upon clutter.
- Set a splurge date! It shouldn’t be all restrictive; decide on something you really want to spend on and plan to indulge lavishly and guilt-free. Just make sure you work it into the budget, it’s something you truly value and brings you joy, and it doesn’t compromise your ‘hard limit’ and you’re set to spend! It could be an item of clothing, a meal out, anything that YOU love.
Enjoy extra earning!
You may think of the ‘holidays’ as a time to wind down and relax, but this isn’t the case for a lot of people. Many people (my husband included) don’t get time off for Christmas and some people don’t love all the festive cheer. I get it. I wasn’t really into it until I had children, and now I do it for their benefit primarily. If you have some time on your hands, you could consider starting a temporary side hustle to earn some extra cash to fund your festivities, or even better, your index funds! Here are some to consider:
- Pet or house sitting. Many people (especially in the UAE) go away over Christmas and need someone to look after their houses, pets and plants. This could be the perfect opportunity to make money and enjoy the company of a furry companion. Make your intentions clear on Facebook and spread the word around friends, neighbours, and colleagues – I reckon you’ll be in high demand and quids in!
- Give people lifts to the airport and/or events. With many people travelling, if you offer slightly less than taxis, you will get loads of work. Spend a couple of evenings as a chauffeur and earn yourself a free night out!
- Run Christmas-themed activities for children or adults. People love Christmas events, especially reasonably priced ones. You could offer a kids’ arts and crafts morning during the holidays or an adults’ wreath-making morning. Whatever interests you – just plan out your event, purchase some materials, organise a location (could be your house/garden), spread the word and you’re set! If you charge each person 70aed and you cater for 25 people, you’ve made 1750aed (before overheads) for a couple of hours of work. Once you have your event planned, you could repeat it several times for increased revenue.
- Tutor for exam subjects. A lot of parents pause tutoring over the holidays, but many GCSE, A-level and University students will continue studying. If you could offer tutoring or proofing essays, this could be a healthy earner for the holidays! Even offering to babysit children for working parents can be useful to so many during school holidays.
- Create holiday-themed crafts or gifts. People LOVE personalised, handmade gifts and crafts at this time of year. A lot of people are forgoing large corporations for small businesses for their choice of holiday décor and gifts. If you have a penchant for creative pursuits, put it to good use – Christmas tree decorations sell well, as well as UAE-themed trinkets for people to take back to gift in their home country.
Enjoy the frugal festivities!
Finally, after all that hard work, take the time to enjoy the holiday season. The best way to do that is to do more of what you value and less of what the media tells you to do! It sounds cliché, but the true value of Christmas is spending time with loved ones, and it doesn’t have to cost a fortune. Don’t feel pressured to carry debt into next year if it doesn’t sit right with you. Write a gratitude journal in December and look back at it next year when you begin the planning process again – you will quickly see what truly brought you joy during this season.
Happy holidays friend.
If you would like to book a financial accountability coaching session to help you work through these steps or stay accountable to your goals, send me an email at [email protected] or drop me a line via the contact form and we can see if we are a good match.
Good luck on your financial journey – congratulations on taking the leap.
