Christmas arrives fast and is gone just as quickly – and that’s true for your savings as well. You don’t need to be scraping for cash in the days before Christmas to splash out on your loved ones.
According to the latest figures from the 2013 National Savings and Debt Barometer, 17 per cent of Australians had already planned their Christmas spending by September. Of those, over half had set their budget, and around two out of five had already purchased gifts.
If you’re in the remaining 83 per cent, don’t worry. If you save the slow and steady way, your cash should already be there.
With Christmas fast approaching, savings tips can help you plan ahead for these expenses. After all, we’re expecting them. And the best savings tips go unnoticed until they cushion those big outlays.
Pay with your own cash
How much cash do you need? According to the Australian National Retailers Association (ANRA) survey1 of shoppers in the lead-up to the Christmas rush, 59.4 per cent planned to pay with cash. We were slightly savvier than the year before, but with more than 40 per cent of the nation planning to hit the plastic, we could do better. Start budgeting. And pace it out.
Would ditching credit make a difference?
If you’re a typical Aussie, yes it would. We owe about $36 billion on credit – an average of about $4500 per cardholder.2 That means the average cardholder is paying around $800 in interest each year if their interest rate sits around 15 per cent or 20 per cent.
Watch what you eat
What if we declared that ditching bought lunches and coffee could save you more than cutting up your credit card? Going without habits is that powerful. If you spend $10 a day on lunch with two cups of coffee at $7, that’s around $85 a week. You are pilfering $4080 from your savings each working year (or around five times the average cost of credit card interest). Think about the gifts you could bestow with that. It’s the equivalent of a used car or a couple of overseas trips.
Automate all of your savings efforts. Online savings are also perfect for any (necessary) online spending. Retail stores took in billions last Christmas. Online shops shared in around $767 million of that, according to ANRA. Be ready to get in early and spend your savings online.
High interest savings accounts
Your excess funds should be funnelled into a savings account that achieves real results. Say you started with $5000 and directed that $85 lunch savings each week into high interest savings. You would have saved $850 of your own money while interest kicks in with almost an entire week’s worth of funds.
Avoid bank fees
This is another simple way to recover cash that seems to disappear from our accounts. Our online savings accounts have no fees and no minimum balance. But if you transfer funds to an account with charges to use ATMs, any gains quickly disappear. Do that twice a week at a $2.50 ATM and you’ve lost $260 each year.
As one of our favourite times for spending, Christmas is also one of the easiest costs to predict. Some attention to the way we spend money each week could see your savings account primed for the most festive season yet.[Sources]