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You may be very keen for end-of-year festivities to farewell 2020, but celebrating during the holiday season can come at a cost. With a clear plan and clever budgeting, it doesn’t have to.
Despite the economic impact of the coronavirus health emergency, forecasts have Australians spending 2.8% more than last year across retail stores during the 2020 Christmas trading period.
The amount Australians were projected to outlay this holiday season could be as much as $54.3 billion, according to the 2020 Christmas retails sales forecast by Roy Morgan’s in conjunction with the Australian Retailers Association.¹
Perhaps unsurprisingly, the largest percentage increasing in spending has been predicted for the food category, while due to the impact of COVID-19 and restrictions, hospitality spending was forecast to be 18.7% down on a year ago.
Queenslanders were expected to be among the bigger spenders, with Christmas retail spending in Queensland forecast to grow by 9.3% on 2019 to around $11.8 billion.
However, while the temptation may exist to spend up big, there are better ways to start the new year than dealing with holiday-season overspending.
There are plenty of ways to enjoy the holiday season to the fullest while ensuring the repercussions of holiday-time splurge don’t dampen your spirits.
Boost your festive finances by selling items you no longer want online, in a garage sale, or at a local buy-swap-sell. Cashing in on items like clothes, books, jewellery, furniture, or sporting equipment can make way for the new.
The items you no longer want could also be just the gift someone else is looking for this Christmas, so it’s a win-win.
Lists are great guard rails to help keep you on track.
Make a list for presents and how much you want to spend per person.
A list for entertainment, including food and drinks, may also be helpful to keep a check on spending.
Australians’ shopping habits are shifting, and the traditional peak Christmas shopping period is now happening in November. This is largely being driven by an increase in online shopping and online shopping sales events.
More than 8 million Australians said they were taking advantage of 2020 Black Friday and Cyber Monday sales.²
Black Friday is the Friday immediately after the Thanksgiving holiday in the US, while Cyber Monday is the Monday immediately after Black Friday, so it fell on the weekend of 27-30 November in 2020.
Australian shopping habits research shows the number of people taking advantage of online shopping sales in 2020 included an estimated 2.8 million people who had never shopped the sales before.
Making lists and budgets aren’t particularly effective if you don’t keep an eye on the money going out.
Keeping track of your festive spending is the best way to avoid going over your holiday season budget.
Use an app, write it down, or keep track through your online banking.
When the Christmas decorations have been packed away, festive season debt may linger long enough to impact you throughout 2020. So, be careful with your credit card at Christmas.
According to Reserve Bank of Australia statistics,³ there has been a fall in popularity of credit cards and a rise in Australians’ use of debit cards following the onset of the pandemic in March 2020.
Between March and August 2020, the figures showed the number of active credit card accounts in Australia had fallen by 3.6% to just under 14 million, and the number of cards on issue was down 3.5% to 18.7 million.
Buy Now Pay Later options, such as Afterpay, operate without a service fee for customers who pay on time.
Buy Now Pay Later may be a great way to spread big costs out over time, but you still need to ensure the cost is within your budget.
Other tips that may help you manage Buy Now Pay Later spending include:
When you have checked everything off your list, it is time to stop shopping.
Try to avoid stopping by the shopping centres for any last-minute pick-ups or just to see what the shops might have.
If you can’t resist being part of the hustle and bustle of last-minute, late-night shopping, plan and budget for stocking stuffer purchases for this time.
You will get your shopping fix, buy something you need, and not blow the budget.
The period immediately after the holidays may be the perfect time to check over your budget and make plans for the new year. How did you do? Did you stay within budget? Were there places you could have cut back?
The days following Christmas are also synonymous with sales. This might be a chance for you to get a jump start on your next Christmas. This may be so much easier if you’ve budgeted accordingly.
As a QSuper member you have access to over-the-phone financial advice. Personal financial advice may help you save money right now, build a better future retirement, protect what you have and set strategic goals.
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1. Media Release, 19 November 2020, 2020 Christmas retail sales set to grow 2.8% to $54.3 billion, Roy Morgan at www.roymorgan.com
2. Media Release, 25 November, Black Friday set to surge with 2.86 million first-time Aussie shoppers this year, ING at www.ing.com.au
3. Reserve Bank of Australia, Credit and charge cards – Seasonally Adjusted Series, accessed 30 November 2020 at www.rba.gov.au
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