Christmas is only a few days away and the closer we get to it, the more pressure is placed upon us to spend our hard-earned money on festive decorations, special presents and lavish parties. As the past holidays have shown, Christmas can drive even the most frugal person to spend beyond what the wallet would allow.
Consumers around the world have mixed holiday spending intentions this year as some markets continue to face economic volatility. Some choose to tread the waters very carefully and exercise some restraint, while others are likely to spend more than they did last year.
In a survey among more than 18,000 respondents in Europe, consumers expressed their intention to go slow on holiday spending and reduce the number of gifts they purchase. “Morale is low among Europeans, with consumers still faced with the debt crisis and uncertain about the future,” says Deloitte in its 2012 Christmas Spending Survey.
In the US, despite growing student debt and continued concern about mortgage borrowings, spending is forecast to rise by between 3.5 per cent and 4 per cent, as more consumers plan to increase their festive outlay this year, according to the 13th annual holiday spending survey by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA).
Here are a few things to keep in mind to ensure your bank account will survive the holidays:
Set up a budget
The ideal thing to do should have been to set up a “Christmas saving pot” early in the year, preferably around January, according to Natalie Storey, financial consultant at Acuma Independent Financial Advice, but if you haven’t done it, the smart thing to do is come up with a last-minute plan and set aside a budget.
“With just a little planning, consumers can substantially reduce their holiday spending debt load without sacrificing holiday quality,” says Stephen Brobeck, CFA Executive Director, in a press statement.
Write down all the things you want to spend on, including Christmas décor, food and drinks, presents and party clothes, as well as projects and activities that make up your holiday. “Examine each item and ask yourself, does it earn its place in our celebration?.” You might discover how much you’re doing just out of habit or perceived expectation,” advises CFA and CUNA.
“I would suggest not leaving it a day longer. Sit down at the computer or with a pen and paper and write down [the anticipated expenses], adds Storey.
“Once you have the information written down, it might come as a huge surprise the amount it will cost. If this is the case, look at areas you can trim down. Can you look to reduce the amount you spend on each gift? A lot of the time, it is the thought that counts to most people and not the value of the item.”
Be smart about gift buying
Giving presents to loved ones and friends is a joy. Yet it is one of the leading causes of financial stress for most people. Once you have established how much you can afford to spend on gifts this year, write down the names of people you intend to gift and divide your budget among them. Make sure you stick to the budget for each person.
When it’s time to go gift shopping, plan ahead and don’t grab the first items that catch your attention. Spare some time to visit the shops, compare prices and find the best deals. According to CFA and CUNA, you can save more than 10 per cent on most items, sometimes considerably more, by comparing prices at different stores.
“Giving presents is an area which can easily become corrupted by advertising. The key is to be prepared before you start spending… And remember that not everyone needs an actual gift. Neighbors, teachers and work colleagues will be happy with a plate of home-baked cookies or just a card with a nice message inside,” suggests Dr Annie Crookes, a psychology lecturer at Heriot-Watt University in Dubai.
For family and children, Crookes suggests giving joint gifts or something that the whole family can share. “Instead of buying each child an equally expensive new toy, buy one that they can share and then spend smaller amounts on individual presents. Also, while children are often very good at emotional blackmail, the reality is many of the expensive items they beg for will have been forgotten by next summer,” she says.
Recycle or make your own decor
Christmas trees, lights and other festive ornaments are a staple during the holidays, but they can unnecessarily impact one’s finances.
"All things bright and beautiful cost me a thousand dirhams every year. Christmas decorations are expensive and most of us want new ones every year,” notes Preeti Bhambri, managing director and founder of MoneyCamel.com, a personal finance site in the UAE.
It doesn’t matter whether you’re an artist or not, get your creative juices flowing and make your own decorations instead. It’s not just economical, it is a fun activity for the family, too. “You can use house waste like old clothes, used paper, empty boxes and glass bottles,” suggests Bhambri.
Another great idea is to recycle old decors or you can check out hypermarkets that sell such items at lower cost. “Do you have a decoration from last year you can recycle? Have a look in stores like Hyperpanda, Geant and Ikea for additional decorations at a small cost,” suggests Storey.
Don’t buy a new holiday outfit
For most people, getting dressed for the occasion is as vital as giving gifts and putting up the holiday trimmings. Buying clothes accounts for one of the biggest expenses during the holidays. Don’t strain your bank account any further and look through your wardrobe instead.
“Re-vamp old dresses, put clothes together in a new way or buy new accessories rather than all-new outfits. Also, bear in mind that rarely do people remember what we have worn before and even less likely are they to actually care whether or not your clothing was this year’s or last year’s collection,” notes Crookes.
“Because, psychologically, we are the centre of our own lives, we forget that others are also busy focusing on themselves. So the feeling that we are being rated or analysed socially is a fallacy and most people have little memory or judgment for what we do or wear,” she adds.
Split up Christmas dinner tasks
No Christmas celebration is complete without a special dinner shared with close friends and family. Whether you intend to have a sumptuous meal outside or indoors, you might save a little bit of money that you can use later in your next summer trip or child’s school fees if you split the dinner cost among your nearest and dearest.
“Invite friends over and split the food task up between you and you will be surprised how much you save. If everyone contributes, it will be less of a burden on the bank balance,” says Storey.
A great idea is to ask your friends to bring a dish from their home countries or bring a traditional table decoration from their family. And if you choose to prepare everything, keep the menu simple so that you will only need to buy a few ingredients that can be used in bulk, says Crookes.
“Shop at the cheaper stores for the main items. Will your guests really know the difference between a Spinneys or Lulu turkey? And avoid impulse buys. If it was not on the list when you left home, it isn’t necessary for the party.”
Grab holiday deals
It’s that time of year too when retailers, hoteliers and other enterprising merchants cook up special promotions to entice even the most budget-conscious to open their wallets. If you really have to buy gifts or share a special meal with the family, why not take advantage of these offers?
Group-buying websites are one of the places to look for that perfect gift or venue for your Christmas brunch or dinner without breaking the bank. At Cobone.com, the “Christmas Shopping Store” offers a selection of deals from electronics, toys, fashion, jewellery, accessories, gadgets and even getaways at “best market prices.” However, make sure to compare online prices with those in physical stores.
While you’re shopping online, look beyond the traditional gifts and surprise your friends and loved ones with something different. “Be creative. There are thousands of amazing gift ideas that are different and will not cost you an arm and a leg,” says Pieter Sleebloom, Cobone.com’s chief strategy and sales officer.
“Think about a pampering spa treatment, a relaxing massage, a diving trip to Musandam or that dream holiday for you and your family. You will be able to find these gifts with discounts up to 90 per cent,” he adds.
For shoe fanatics looking for the perfect pair to wear or give away this Christmas, watch out for sales at your favourite mall. Shoe brands such as Valencia, Fabi, Casadei, Giuseppe Zanotti Design and Loriblu are on sale starting Wednesday to January 2, 2013, offering 25 to 50 per cent discount.
Check out with your favourite restaurants if they have special offers, too. Many dining outlets in Dubai have planned something exciting for Christmas. At Carluccio’s, a Christmas menu that is available from December 2 to 30 this year can be had for Dh89 for two courses and Dh109 for three courses. Over at Mango Tree Bistro, a five-course Christmas eve menu will set you back only Dh85 per person.
