The holiday season can be an expensive and stressful time of year. As summer rolls around, the cost of gifts, celebrating, eating, holidaying and entertaining can start to add up.
For many people, this change of season can bring financial stress. One reason for this is that there are often longer gaps between pay cycles during the break. Hours available to casual, contract, part-time and freelance workers can start to dry up across some industries. For example, across central, western and northern Melbourne there are an estimated 64,000 people employed in education and training, and another 52,000 in manufacturing.
These industries tend to go quiet over the holidays and while many of these workers are employed full-time (meaning they’re usually guaranteed minimum conditions like holidays and leave), for those with less secure jobs it can all add up to less income.
Many households in these areas are also in debt. One report found that 18 per cent of households in the Hume and Brimbank areas were under mortgage stress, compared to the Victorian average of just over 11 per cent. In the Hume, Brimbank and Melton area, almost a third of households were also under rental stress.
When you consider all the additional costs from this period — retail and gifts, food and drink, holidays and celebrations — you start to get an idea of why financial pressure can cause stress at this time of year.
The holidays and managing financial stress
So what can you do about it? To help you out this season, here are some tips to reduce the load on your wallet and help you stay afloat — both mentally and financially.
Have a plan and a budget
Yes, it sounds boring. However, knowing your plans and how much you’re going to spend can really help keep your finances under control — and save yourself a whole load of worry.
Budgeting isn’t just about deciding how many gifts to buy and what to spend on holidays. Do you know how many social and family gatherings there will be? Plan ahead for everything and figure out how much it’ll cost.
Start with a list of everything on which you need to spend money — including gifts, food, social activity and travel costs. Obviously you also need to include your regular expenses like rent, bills, mortgage, insurance, etc. Then, once you’ve figured it all out, set your budget and stick to it.
It’s surprisingly easy to lose track of where the money goes. Credit cards and online payments can make it harder. So, avoid nasty surprises and keep track of everything.
Another tip is to make your budget higher than what you plan to spend — just in case things go over a little or if you have unexpected expenses.
Figure out exactly where your money is going
Can you identify exactly what’s causing the financial pressure? Are there big items on your shopping list, or are there many smaller items like smokes that sneak up? Does betting or going to the pub play a part?
Most of us like to spoil the ones we love or spend a bit of time socialising at the pub. However, if these things are eating into the holiday budget then it’s time to take control.
Are there items on the shopping list that you can do without? Can you arrange with your family to do gifts for the kids while the adults do a Secret Santa?
Try not to fall into the trap of spending too much on credit, if you don’t have the funds. Many retailers seem to make it all-too easy to just spend and forget, as do credit cards. If you can afford credit, then make sure you fully understand the terms and conditions of your purchase.
Whatever you buy will have to be paid back later — and if it comes with a hefty interest rate, it could cost you a lot more in the long term.
Be especially wary of short-term loans (often called payday loans). They may seem like an easy solution to quickly get cash, but the amount you need to repay can be far more than your original loan.
Low-cost options and alternatives
It is traditional for people to give each other chocolates, greeting cards and sweets over the holiday period. If you’re on a budget, you could try a low-cost option that others will appreciate.
If you’re handy in the kitchen, how about making some amazing creations like chutney, cookies, or cakes as gifts? They will stand out from the mass-produced confectionery.
Personalised cards are another way to show someone that you’ve put a lot of thought into it. Colourful cards can be made at home for next to nothing and even include a photo (a pet or photo of you together often goes down well).
Some people even give their time as “vouchers” — helping someone with gardening, DIY, cooking or minding children. It may not seem like much, but they will appreciate it.
Talking of cooking, instead of eating out at a restaurant or the pub, can you do a barbecue in a back yard or local park?
Know your weakness
If you know your weaknesses, you can take steps to manage them. For example, if you know that every year you end up shopping on Christmas Eve, spending too much on last minute gifts, put aside two hours earlier to start your Christmas shopping.
If you usually spend too much money when you meet up with friends, decide on a budget and withdraw your spending money before you go — once the money is spent, the night is over. To be absolutely certain that happens, consider leaving your bank card at home. Just be sure that you remember to put it back in your wallet or purse when you get home!
Plan for next year
It’s never too late to start a Christmas fund. For example, putting aside $10 per week will result in more than $500 to spend at the end of the year. Some banks even offer high interest accounts that will make a small amount work harder.
Planning can also work for big items, like TVs, phones or white goods. Make the purchase a few months before Christmas and pay it off with layby. It’s far better than paying the added interest from a credit card and you’ll also beat the huge crowds of people who left it to the last moment.
Concerned? Talk to a professional counsellor on 1300 096 269. It’s free to people in north, western and central Melbourne and is available 24 hours a day, seven days a week.
Want to know where else you can get help? Find out how to access additional community support.
The CAREinMIND blog is delivered by On the Line. The views in each post do not necessarily reflect those of North Western Melbourne Primary Health Network.