Saturday, 20 December 2014

Making Christmas Easier On The Pocket

As I wrapped some of the boys presents last night my thoughts trailed back to a comment on facebook that I saw saying "why do bills have to come in December?!" and I thought I must post how we manage our Christmas funds so it doesn't hit the pocket as hard. For some families December is a real struggle and once upon a time it was for us as well.  I haven't shared a frugal post in a while so why not start with this one? :)

We started this way of managing Christmas when Master 7 was a baby and we had gone through a few Christmas's as a family and our credit card got hammered every year, leaving us with a lovely Christmas day but when they fun was over we had this massive debt added to the card to somehow take care of.....that was not what a young family needed, so it was time to take some action.

We worked out that the biggest financial hurdles of Christmas were buying presents and special Christmas food. So we started this system involving two key items - saving for presents throughout the year and paying our December utility bills off over the course of the year to give us extra money in December for food and last minute Christmas items. We did this by these two systems:

First we took a figure that we thought was realistic for Christmas presents, I think we started with around $500 back then although it is a bit higher now...
We divided this into 12months to get a monthly figure, then to our budget we add this monthly figure. When we first started doing this we opened a new account just for this Christmas fund. So every month we squirrel away this amount into the Christmas account and leave it be. This builds up over the year and means coming close to Christmas time I know what funds are set aside for when the sales start. I'm not one for buying in the middle of the year and putting things away as  I prefer to wait until closer to December to start organising what I am getting for everyone as tastes can change in the course of half a year.
This can be changed into fortnightly or weekly amounts also depending on your pay cycle. The important part is to work out a little bit from each pay and put it away somewhere it can be left to build up for the end of the year.

The next step we took which proved a major help was organising the December bills for Power, Phone/Broadband and Cell Phone to be paid over the course of the year. Come December you will be in credit enough to cover the bill meaning you have the amounts you normally pay monthly free to use for Christmas - for us that was food :)
We worked out what we would pay as an average for each month by adding the previous 12months of bills together and dividing by 12.  With this monthly figure we divided that into a further 12months to break it down into a small monthly amount to build a credit over the year and we changed our budget to reflect this. No matter what the bill came in month to month we paid this set figure.  This has always meant by the time you get to December the credit covers the bill and you also get to take advantage of the early payment discounts as well.

As a side note we have found over the years of doing this for power the credit you build up over the warmer months at the start of the year covers the larger bills in Winter and once winter is over the credit starts building up for Christmas, so you aren't playing catch up on your winter bills either.

This system has worked well for us over a number of years now and a stress free Christmas is the best Christmas :) I recommend annually or every couple of years you review the figures to make sure they are still working of you although you should include any increases in the utility bills when the happen.

This is our magical Santa visit from 2011 :)

Just remember a budget is your most important tool for managing your money and avoiding/paying off debt. I hope this may help in some way if you are struggling to make ends meet at Christmas time.

MrsW xx

1 comment:

  1. Great tips Mrs W!

    I find Christmas a bit of a strain on the budget. It is so hard to be frugal especially when I want to make yummy things to eat on the day, and the ingredients can be so expensive. We don't buy many presents anymore,we just give money to family for them to buy something for themselves. But I need to start including this in my budget as you say.

    I have just received an electricity bill and phone bill, plus one from the hardware store and on top of that two car registrations. The phone and electricity aren't due until January, so that wont be too bad. I don't put anything on credit card, preferring to pay cash.

    You have a lovely Christmas and I will see you in the New Year xx


Hiya, thanks for taking the time to comment on my post. I can't wait to read your comments and to share ideas, I am a busy mummy with 2 boys to run around after so I will try and get to comments as quickly as I can...if there is a delay in seeing them published this is why, not because I don't care, I'm just taking some time to smell the roses :)

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