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Christmas budgeting tips: How to spend less at Christmas
Certain times of the year – Christmas, we’re looking at you – can have Australian families at breaking point. There is pressure to spend on gifts, entertainment and travel to attend family gatherings and events. Many people tend to live beyond their means at this time of year, and it can take months to catch up on finances.
Nobody wants to step into the New Year with debt. The best way to save money at Christmas is to prepare a realistic budget for yourself. From gifts to catering, map out your festive season in advance, make a plan and stick to it. This will help you avoid unnecessary or unplanned purchases. These small, conscious choices may reduce any potential financial stress.
Here are some budget-friendly ways to enjoy the festive season without that post-Christmas financial regret.
How to make a budget for Christmas
It may sound overly simplistic, but setting a budget and sticking to it is key to limiting spending. In 2024, the majority of Australians (74%) had a spending limit in place but only 29% managed to stick to it, with many resorting to credit cards or ‘buy now, pay later’ services like Afterpay to fund their spending.
When setting your budget, pick a figure that you’re comfortable spending across all festive season-related purchases – gifts, decorations, party outfits, food and outings – and stick within the limits.
Remember, purchases you make on credit cards and ‘buy now, pay later’ services need to be included within that budget. This will help keep those bills manageable afterwards, as you will already know how much you’ve spent. There are several budgeting apps you can use, while many banking apps like CommBank have helpful budgeting features built in. The Australian Government Moneysmart website also has a helpful guide.
Budget-friendly Christmas gift ideas
While Christmas is often an excuse to spoil the little ones, it doesn’t mean we need to go bankrupt! Ever heard of the Four Gifts rule? Instead of buying a mountain of gifts for the kids to unwrap on Christmas morning, you give them four things: Something they want, something they need, something to wear and something to read. This helps you become more intentional about your gift giving and limits needless spending.
As for the adults in the family, cut costs by arranging a ‘Secret Santa’ or ‘Bad Santa’ exchange. That way, the adults still get to enjoy a bit of Christmas magic without the stress of buying for everyone. Plus, with over $1 billion spent on unwanted gifts at Christmas in 2024 alone, this will not only save your wallet, it can also help save tonnes of waste going into landfill.
Handmade gifts are also a great option to reduce your spending, while having the added benefit of being special and unique. These days, time is a commodity we have in short supply, so your loved ones will appreciate the effort and time that goes into something homemade. Go one step further and give a handmade gift with a healthy twist. Check out some of our fun and festive dietitian-approved treats.
Other gift ideas include a goody basket filled with someone’s favourite holiday treats or nostalgic snacks (throw in some healthy options for good measure), or consider putting together a self-care hamper filled with things like natural beauty products, candles, an eye mask or a heat pad. Plants and succulents also make lovely gifts and have the added benefit of bringing greenery into someone’s home.
Plan your Christmas feast ahead of time
It’s an expensive meal, and the costs of our favourite Christmas platters continues to rise, but budgeting for your groceries at this time of year can go a long way to help you save. Set a figure you plan to stick to and work out portion sizes based on the number of guests beforehand so you don’t over-cater. Plus, not having too much leftover food and drinks hanging round means you’re less likely to be tempted by calorific fare for days afterwards, or needlessly wasting food.
If your hosting efforts are threatening to send you over what you can realistically afford, there is no shame in asking people to pitch in by bringing their own drinks or contributing a dish to the spread. The more the merrier!
Is financial stress affecting your health and wellbeing?
Some signs that financial stress is affecting your mental wellbeing include:
- arguing with loved ones about money
- trouble sleeping
- feelings of anger or fear
- mood swings
- tiredness
- loss of appetite
- withdrawing from others.
How can you get help? Usually, the earlier you ask for help, the more options will be available to you. Start with talking to your bank and seeing what they can offer in terms of financial difficulty programs. Also, Australians have access to a free National Debt Helpline on 1800 007 007.
If you or someone you know is struggling with the burden of financial stress, seek support from a medical professional like your GP or a counsellor. You can also contact mental health support services:
Beyond Blue: Call 1300 22 4636, 24-hours/7 days a week.
Lifeline: Call 13 11 14 for 24-hour crisis counselling and suicide prevention services.
Why is it important to budget at Christmas?
With Christmas around the corner, it’s important to take a moment to consider not only the ‘here and now’, but also the aftermath. After all, financial wellbeing makes up a large part of your overall wellbeing. It’s an important consideration in keeping you and your family happy, healthy and stressing less! We also know that mental health and financial safety are strongly linked – financial stresses can add to an existing mental illness or create feelings of anxiety or depression.
Research from Beyond Blue, titled ‘Australia’s 2024 Mental Health and Wellbeing Check’, found that nearly half (46%) of respondents identified financial pressure as a key factor in their distress. Beyond Blue has teamed up with not-for-profit organisation Financial Counselling Australia to create an online tool designed to help people assess their level of financial and mental stress. Recent results have found that over 70% of users fall into either the ‘Struggling’ or ‘Critical’ categories of the financial and mental wellbeing scale. If you feel that money problems might be a cause of concern, take the quiz and find out where you sit on the scale. There are support services available to you on the Beyond Blue and Financial Counselling Australia websites.
Nobody wants debt as a guest at the table this Christmas. When not well-managed, it’s also that annoying guest that overstays its welcome well into the New Year. By following the tips above, we hope you can maintain or improve your own financial wellbeing this Christmas and enjoy a stress-free start to the new year.
Frequently asked questions (FAQ)
How can I save money at Christmas?
Set a budget that feels comfortable for you and stick to it. Setting limits may help to reduce financial stress.
What should I include in a Christmas budget?
Include all your expected festive expenses, including gifts, food, travel, decorations, entertainment, hosting costs and any holiday events.
When should I start budgeting for Christmas?
There’s no harm in getting prepared a few months in advance. Giving yourself time to feel organised can make festive spending more manageable. It will give you more time to save, compare prices and spread costs across the year rather than feeling rushed in December.
The above information is intended for general information purposes only. It has been prepared without taking into account your objectives, financial situation, needs or health status. The information provided should not be relied upon as financial or health advice and does not supersede or replace a consultation with a suitably qualified financial or medical professional.
Sources
https://www.medicarementalhealth.gov.au/living-well/feeling-safe-secure
https://www.beyondblue.org.au/about/media/media-releases/beyond-blue-data-reveals-distress
https://www.beyondblue.org.au/mental-health/financial-wellbeing/money-quiz
https://www.beyondblue.org.au/mental-health/financial-wellbeing/financial-wellbeing-supporter-pack
https://www.financialcounsellingaustralia.org.au/
https://www.cbhs.com.au/mind-and-body/blog/Budgeting-apps-to-help-your-financial-wellbeing
https://moneysmart.gov.au/budgeting
https://www.cbhs.com.au/mind-and-body/blog/treat-yourself-christmas-treats-with-healthy-tweaks
https://www.abc.net.au/news/2023-12-17/christmas-lunch-inflation-cost-price-food/103186506
https://www.cbhs.com.au/mind-and-body/blog/savings-tips-for-your-grocery-trips
https://moneysmart.gov.au/managing-debt/financial-counselling