'Tis the season for saving

Recovery mode

Still recovering from the effects of last year’s end-of-year festivities? We’re not talking too much egg-nog here (although, sadly, festive overindulgence can leave a lasting mark on one’s waistline). Nope. We’re talking finances. And, just as you need to limit how much Christmas pudding you eat if you want to avoid those extra kilos, you may need to be mindful of your spending habits if you don’t want to emerge in March with a financial hangover.

The silly season – which kicks off around the time that the gates open to the Melbourne Cup and can continue right through summer as friends start getting hitched – can make a huge dent in your savings. You’ve been frugal all winter, watching the money in your savings account grow … and then, before you can say “where’d my money go?”, it all disappears down a drain clogged with expensive cocktails, over-the-top gifts and party shoes.

Some people turn to the credit card to fuel their festive spending, while others raid their savings. Either way, it can leave you feeling broke by the time the new year rolls around. So what can you do about it? Here are some tips for how to emerge from the upcoming silly season with your savings intact.

Lead yourself away from temptation

At this time of year, when there’s more cash going out than coming in, it can be tempting to overload the credit card. But that could leave you with debt – and interest – to pay off for the rest of the year. To avoid this temptation, some people put their credit card in the freezer. Others stuff it deep into the sock drawer. Whatever works for you!

Or, if you’re more likely to dip into your savings at this time of year, then it’s time to go hardline. If you’ve got a decent chunk of money sitting in a savings account – perhaps a growing home loan deposit or holiday fund – then don’t let the Christmas cocktails get to it. You could lock it away in a term deposit or try other tricks to hide your money.

You could consider withdrawing a set amount of cash at the start of the week – when it’s gone, it’s gone. Hard if you’re buying Christmas presents, but at least this makes you think twice before you splurge on your partner’s present. Or, if you don’t want wads of cash in your wallet, try to pay for things with your debit card so that you’re only spending money that you already have.

Even better, so you don’t make a dent in your serious savings, you could think of ways to reduce the financial overindulgence that silly season shenanigans are so famous for.

Good times, on the cheap

Guess what? It’s still possible to have fun over summer without breaking the bank. It just takes a little restraint. For example, you could get a $5 mineral water for every second drink instead of a $15 glass of wine (your head will thank you the next day, too). Go on a beautiful BYO picnic with your mates instead of meeting at an expensive restaurant. Think twice about buying a new outfit just to wear to the staff Christmas party.

While you’re limiting your celebratory spend, why don’t you see if you can ditch a daily habit for the next few months to free up some cash for gift-buying? For example, instead of catching public transport to work, make the most of the warmer weather and walk or ride. Or bring lunch from home for a month. This could save you a couple of hundred bucks, which you can then put towards buying some scented soaps for mum and a Kris Kringle for a cousin.

Speaking of gift giving, you don’t need to go all out to show someone you appreciate them. In fact, the most heart-warming gifts are often handmade. Search how to make a macramé hanging basket and get crafty tying knots. Get creative in the kitchen and whip up batches of rocky road to give to the neighbours. Give your mum and dad a voucher for a day’s labour (or whatever you’re good at). You get the gist.

If you’ve got your heart set on buying real presents, then shop a little smarter. Hunt for bargains online – they do exist. Gently downgrade expectations – if your loved one has expensive tastes, hint at more affordable options instead. Set a budget per person (making sure you can comfortably stick to it) and rise to the challenge of shopping to that budget. It can be done. And don’t be afraid to talk to other members of the family about setting a spending limit – you can all but guarantee that everyone will be keen on the idea.

And remember, be clear about your bigger savings goals. This way, you can look beyond the silly season to what you’re saving for – so that if you do end up being a bit of a scrooge this year, then at least you’ve got a good reason for it!