A guide to household budgeting this Christmas

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3 min read’Tis the season to blow the budget, right? Australians spent a whopping $45 billion in the six weeks leading up to Christmas 2014 (Australian Retailers Association) – or an average of $2,500 per person aged over 14 – and this year is shaping up much the same.

But it doesn’t have to be the same for you if you follow these budget-friendly tips for a frugal yet still festive Christmas.

1. Draw up a Christmas budget.

It’s easy to overspend when you’re buying gifts and Christmas supplies one at a time. Now is the time to work out how much you can afford to spend during the festive season and draw up a budget, including who you’ll buy gifts for and a spending limit per person. Sticking to a budget will help you avoid the trap of impulse buying. And always remember, as per any other month, you should still contribute to your savings during the Christmas holiday period.

2.  Trim the gift list.

Talk to family and friends about ways to reduce excessive Christmas gift giving. They may involve setting a price limit per gift or applying a children-only rule. Among colleagues and friends, a Kris Kringle arrangement is as much fun as it is budget friendly.

3. Change your shopping habits.

Buying food for entertaining and keeping the troops well fed over the Christmas holidays can be expensive. Consider switching to a discount supermarket or even driving a little further out, and buying in bulk. If you plan ahead and prepare detailed shopping lists to eliminate last-minute dashes to the shops, you could cut your grocery bill by half.

4. Compare prices.

Starting your shopping early has many advantages – you’ll avoid the crazy Christmas rush and retain your sanity, and you’ll have plenty of time to shop for bargains, online and in stores. Even if you leave it a bit late, you can still save money by comparing prices online before heading to the shops.

5. Recycle decorations.

Bored of your Christmas decorations? Rather than starting from scratch and spending big, organise a swap with friends and enjoy a brand new decorating style for free, or get crafty and make your own.

6. Rethink social commitments.

It’s not just gifts and food that can put a dent your wallet this time of year. With increased social engagements and Christmas parties, you’ll find yourself spending more on buying drinks, paying for taxis or babysitters for the kids. Plan ahead and think about which social activities you can say no to, choose BYO venues to reduce the alcohol bill and arrange lifts ahead of time instead of using taxis if possible.

7. Invite contributions.

If you’re hosting Christmas lunch or other festive get-togethers, don’t be shy to ask everyone attending the celebrations to contribute a dish or drinks. Aside from saving you money, it’s also great way to get everyone involved and introduce greater variety to the lunch table.

8. Save on postage

If you’re buying gifts for family and friends overseas, save money on postage by buying online from websites in their own country and having the gifts delivered for free directly to their door. Another postage-free option is buying e-gifts – iTunes gift cards and Kindle eBooks can cover the needs of anyone, from the teenage nephew to Aunty Susan. If you’re one of those people who doesn’t trust the world wide web with your credit card details, never fear – finding a suitable debit card can expose you to less risk by minimising the amount of funds accessible on the card.

9. Swap homes for bargain holidays.

Getting away during the summer holidays is an Australian tradition. For a budget-friendly alternative, arrange a house swap with friends who live interstate or even a different part of the same state. The money you save on accommodation and car hire can be spent on fun activities for adults and kids.

Hopefully these nine tips will help you to have an enjoyable holiday period at the same time as not breaking the bank.

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Bessie Hassan
Bessie Hassan is a Money Expert at finder.com.au, the site that compares virtually everything. She regularly appears on national radio, TV, and throughout online publications sharing her best money-saving tips and property advice. She's passionate about helping Australians make more informed decisions so they can improve their quality of life.

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