The Christmas and holiday season in Australia is synonymous with long summer days, festive gatherings, and, often, an increase in spending. With the celebrations come gifts, travel, dining out, and holiday fun, which can stretch the budget. But with some savvy planning, the holiday period can be more than just an expensive season; it can also be a prime opportunity to get ahead financially.
Here’s how to turn this festive season into an opportunity for financial growth and stability;
1. Create a Christmas Budget – and Stick to It
Before heading into the shopping and celebrations, plan a holiday budget. Think about key categories where expenses typically spike:
- Gifts: Set a spending limit per person, and don’t be afraid to get creative. Homemade or experience-based gifts can be thoughtful and budget-friendly.
- Social gatherings and dining out: December is often packed with events and dinners, so allocate funds accordingly.
- Holiday travel: If you’re going away, consider not only travel costs but also accommodation and activities.
- By setting and sticking to a budget, you’ll avoid the January “bill shock” that so often accompanies the holiday season. Tracking holiday spending can also provide valuable insights into your financial habits, helping with future planning.
2. Jump-Start Your New Year Financial Goals
Why wait for January to set financial goals? Start early by assessing your financial situation during the holidays:
- Did you achieve your financial goals this year?
- Are your savings, superannuation, and investment plans on track?
- What adjustments might be needed for the new year?
- By identifying these aspects now, you can start the year with a proactive plan rather than reactive resolutions.
3. Capitalise on Festive Deals for Smart Investments or Savings, Not Just Spending
The festive season in Australia is packed with retail promotions, but there’s more to seasonal deals than just holiday shopping. Look for opportunities to save on products or services that add long-term value:
- Insurance Policies: Many insurers offer discounts towards the end of the year. Take advantage of these offers to renew or upgrade your policies at a better rate.
- Investments: Some platforms run promotions for end-of-year contributions to encourage investment. Adding to your investment portfolio now can give you a financial boost as you enter the new year.
- Gifts with Financial Value: If family or friends ask for gift ideas, consider requesting something financially meaningful, like contributions towards a savings plan, shares, or memberships that bring benefits year-round.
- Credit Card Rewards: If you’re using a credit card for holiday expenses, make sure to leverage any rewards points or cashback options that can reduce costs on future purchases or even holiday-related expenses.
- Retail Cashback Offers: Many Australian stores and online platforms run holiday promotions offering cashback on purchases. These savings can add up quickly, especially on higher-priced items.
- Loyalty Programs: If you’re planning larger purchases, check whether your preferred retailers have loyalty programs that offer discounts, points, or vouchers for future use.
4. Review Your Tax Strategy
The holiday season is a good time to look over your tax situation too as a mid FY check in:
- Charitable Donations: Many Australians enjoy supporting causes over the holidays. Donations to registered charities are tax-deductible, which means you can support a good cause and potentially reduce your tax bill.
- Superannuation Contributions: Making additional contributions to your super can bring valuable tax benefits
Taking a moment to review your tax strategy can set you up for a smoother tax time come July.
5. Use the Holiday Break to Review and Plan
For many Australians, the holiday season is a time to slow down and reflect. Use this time wisely to:
- Check in on Financial Goals: Assess how close you are to your long-term goals, whether they’re saving for a home, retirement, or a family holiday.
- Adjust Your Budget: The holiday season is a great reminder of the importance of budgeting. Use any downtime to update your budget if needed.
- Consult a Financial Adviser: Starting the year with a plan can be empowering, and a financial adviser can offer guidance on superannuation, investments, and tax planning to help you get the most out of the upcoming year.
Wrapping It Up
With the right approach, the Christmas and holiday season can be a powerful time for financial planning, rather than just a period of extra spending. Setting a budget, taking advantage of seasonal deals, reviewing tax strategies, and planning ahead can make this festive season one of financial growth and opportunity.
If you’d like to chat with a financial adviser about how to start the new year on a strong financial footing, reach out for a complimentary consultation.
