Your Christmas Savings Plan

Jacqueline Hodges

Its only 100 days until Christmas. As you know, Christmas can be one of the most financially stressful times of the year. We all put enormous expectations on ourselves, on what gifts to buy, what food to prepare, where to go, who is coming to stay, decorating the house, and what our Christmas feast will be this year. Christmas is meant to be a joyous time, for love, for catching up with family and friends, for doing something charitable. But if you’re already struggling with debt and meeting financial commitments, then you will struggle with your feelings of peace, joy and goodwill.

So, let’s deal with this. It’s time to get back on track. After all, you do want to spread the joy this year! So, put pen to paper, put a plan in place, prepare a budget, and get yourself Christmas ready. You may need to make some adjustments to current spending habits, but that’s okay. You know it is a little short-term pain for some longer term gain. You may feel overwhelmed by the idea of putting a budget together. So, in this article I will provide you with some guidance to begin your Christmas Savings journey.

The best time to start your Christmas Savings is actually very early in the year. Say around February, when the festive season is well and truly over. The next best time is now! Just think of planning now as your training for next year. You will need to gather the details of your income and expenses.

Remember that you may need to start spending early in December for gifts, decorations, tableware, and frozen foods. And you will certainly need to start spending the week before and up to Christmas for perishable foods. So, make allowance for that early and later spending. If you follow the next few steps you will be well on your savings journey.

Set aside some time and clear a space, so that you are mentally prepared to think about your budget and Christmas savings plan. Have a notepad ready. You can use a variety of tools, such as a mind-map, post-it notes, an excel spreadsheet, an electronic notepad or specialist software. Whichever, tools you are going to use, have these ready to commence your date. Gather all the documents that will help you work out your personal budget. This might include, your sources of income, all your expenses, bank statements and credit card statements.

Look at your income documents and bank statements to work out what your net income is. Write this figure at the top of your list.

In this section, you need to consider where your money goes. Look at your expense documents, bank statements and credit card statements to work out what your net income is. Your expenses will include amounts that are fixed, flexible and some that are quarterly or annual.

Here are some examples for Fixed, Flexible and Monthly/Quarterly/Annual expenses:

• Fixed expenses, include rent, mortgage repayments, car loans and phone/ internet plans

• Flexible expenses: food, clothing, entertainment, medical and additional mortgage payments

• Monthly expenses: mortgage repayments, phone, electricity and private health insurance

• Quarterly expenses: rates and water charges

• Annual expenses: insurance and car registration

• Be honest with yourself. There is no point trying to hide an expense here!

Jacqueline Hodges is a Chartered Accountant, Registered Tax Agent and SMSF Auditor. She is a Financial Adviser and an authorised representative of Wealth Today. She has a wealth of experience having worked in the financial services sector for most of her career. Jacqueline is a firm believer in continuing education and holds a Bachelor of Commerce (UQ), a Master of Taxation (UM), and a Financial Planning Certificate. She established her own accounting firm servicing individuals and small businesses in 2005 and complemented the business in 2015 with the opening of the financial advice division.

“The best time to start was yesterday. The next best time is now.” – Unknown

Disclaimer: The information contained in this article is general in nature and may not be relevant to your personal circumstance and needs. Taxation, legal and other matters referred to in this article are of a general nature only and are based on laws existing at the time and should not be relied upon in place of appropriate professional advice. We recommend that you assess whether the information is appropriate to your needs and if appropriate speak with a financial adviser to discuss your needs, financial situation and investment objectives. HQ Wealth Pty Ltd as trustee for HQ Wealth (CAR 1238791) and Jacqueline Hodges (AR 1238790) are Authorised Representatives of Wealth Today Pty Ltd (ABN 62 133 393 263), AFSL 340289.