Planning your finances around Christmas - December 2023

By Guest Blogger, Louisa Sanghera, Principal Broker,

Zippy Financial

If you’re planning to buy a home in 2024, the silly season can be a tricky time. Between presents, celebrations, catering and even travel, it can be very easy for your savings to take a hit. So how do you have a good time over Christmas, without hurting your bank balance or your goals for next year?

We’re a generous bunch in Australia: According to the annual Christmas Retail Trends Report by Monash Business School, Aussie shoppers plan to spend:
•    $427 on Christmas presents for immediate family
•    $246 for extended family
•    $149 for friends 
•    $266 on themselves.

This adds up to around $1,000 each person – and that’s before we even factor in catering and costs of celebrating. 

The financial stress of Christmas can impact property buyers, especially in the context of the cost-of-living crisis we’ve been dealing with. 

But there are ways to save money for a deposit on a property, despite everything that is going on.

Tips for managing Christmas expenses:

1.     Set a budget – It’s really easy to over-spend on gifts, so commit to a spending budget for presents.
2.    Make homemade gifts – If you make a great lasagne or baking is your favourite way to spend your weekend, give the gift of homemade goodies instead of store-bought gifts.
3.    Give the gift of experiences – Offer to prepare and cook a homemade meal; a night of free babysitting; a picnic at the beach or an outing to the movies. While not free, these can be cheaper than buying gifts.
4.    Don’t exchange gifts this year – If you normally do gifts with family members, ask to skip it this year while you’re saving a house deposit, so you can save a few hundred dollars.  
5.    Embrace secret santa – Don’t want to miss out on gifts altogether? Do secret santa instead (or if you want to enjoy some silliness, do a version of Bad Santa, which each person contributes the craziest gift they can think of).

These are a few of the smart ways you can manage your money over the Christmas season, but if your plan is to buy a home in 2024, there some other things you should be thinking about to get your finances in order.

For the last couple of years in particular, banks and lenders have been very closely scrutinising bank statements when reviewing loan applications.

When they see things like buy now pay later debts, multiple subscriptions, Uber trips and UberEats, it can send the signal that you’re not managing your money as well as you could be. Why? Because all of these things have a “convenience premium” included in their cost.

To get your statements in shape for your home loan application, now is the time to start limiting spending on these types of discretionary items. 

Ready to buy even sooner? If you want to get your finances ready to put your loan application in with the bank in January when everyone else is on holidays, or you just want to see what your options are with your mortgage, contact your broker for a chat, so they can see if you can save money and help you achieve your financial goals.

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