Festive Season Budgeting: Warding off the New Year “Red”

Festive Season Budgeting: Warding off the New Year “Red”

Extra spending during the festive period isn’t unusual – something we covered in an article in January 2020: Getting Back on Financial Track Post-Christmas. Climbing that mountain of debt, financial stress and uncertainty about the year ahead isn’t unmanageable, but imagine how great you’ll feel if you take care of those issues before they crop up.

Rather than needing to get your finance back on track come January 1, there are practical and actionable things that you can put in place now that will go some way to ensuring you don’t kick off 2021 in the red.

Plan Ahead

Generally speaking, good financial decisions don’t come in the heat of the moment – rather they come about through careful and considered planning. The festive season is a great example of this, where last-minute trips to the shops and racing around different stores trying to get the last of your gifts over the line can have a real impact on your hip pocket. It sounds simple but it works – don’t leave your shopping to the last minute.

The end of November, for example, is famous for savings, particularly in the e-commerce realm. Black Friday, Cyber Monday, however the retailers dress it up – what better time to knock off your gift buying. Not only can you snag a bargain, but chances are you’ll avoid the queues, the people (which is even more pertinent during a pandemic), and the stress of trying to squeeze everything in the days leading up to Christmas.

On that note, you may find that your spending during the holiday season is best managed when you “live by the list”. Organise your gift list for those you’re buying for, know how much it will cost you (more on budgeting later), and make a point of sticking to it. Reducing or eliminating your unexpected gift buying this festive season means that chances are, you won’t have any surprises when you check your bank account balance (or when your credit card bill arrives in January).

Know Your Financial Position (and your limits)

This is a pretty simple one, but it warrants repeating – SET A BUDGET. While keeping a budget year-round is a smart idea, it’s important to recognise the potential strain of buying gifts, putting extra food on the table, taking holidays, and all the other costs that come at this time of year.

If you are already running your incomings and outgoings through a budget, make sure to review if in the lead-up to the festive season. Incorporate your likely expenditure for the period into your budget, and look out for places where funds could be reallocated to cover festive spending. For example, let’s say you have two weeks holidays over the Christmas/New Year period, and during the year you pay $50 a week for parking. If your budget dictates that this cost exists throughout the whole year (not taking leave into account), then you may be able to factor those two weeks’ worth of parking money into buying gifts, food, or putting it towards your festive family holiday. Alternatively, you might embrace the spirit of giving and donate to a worth cause (plus, you can enjoy the tax deduction that comes with it!).

Be Honest & Be Thankful

Seen as 2020 has been so challenging and unpredictable, it’s important to be honest with yourself about what you can realistically afford to spend this Christmas (and beyond). If you are fortunate enough to be employed despite the COVID-19 pandemic, there are still no guarantees that your situation won’t change in the New Year. The thought of being unemployed isn’t pleasant, but it’s a harsh reality for many and it’s worth remembering that as far as the pandemic is concerned, we’re not out of the woods yet.

Should you lose your job in the new year (or already have), it would be all the more devastating if you and your loved ones were left in a perilous financial position as a result of overextending the family’s finances at Christmas. With that in mind, sensible spending and a healthy perspective on what is most important may be the best gift you can give yourself this year – with added peace of mind going into 2021.

How MP+ Can Help

The wealth team at McKinley Plowman are passionate about helping clients at all stages of life make sensible financial decisions and promote sound, practical financial behaviours that will not only secure their current wealth, but also lay the foundations for future growth. With a goal-focussed approach, quality advice, and the development of a prosperous working relationship, MP+ are here to help you achieve your financial aspirations in 2021 and beyond.

You can contact our new Vic Park office on 08 9361 3300, our Joondalup team on 08 9301 2200, or check out our website at

written by:

Hayden joined McKinley Plowman’s financial planning team in 2020 as a Senior Financial Adviser after four years as the founding director of a successful financial advisory business, contributing to over fifteen years in the financial services industry. Hayden brings to the MP+ team extensive practical knowledge, especially in the areas of superannuation, investments and insurance. He is passionate about helping clients build strong financial behaviours as well as working alongside them to help define a solid plan to help them achieve their financial goals. Hayden also holds a Bachelor of Commerce degree.

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