Be a smart gift-giver this holiday season

Money and Life
(Financial Planning Association of Australia)


After a year like no other, many of us are looking forward to a relaxing holiday season shared with family and friends. Check out these easy ways to stretch your Christmas gift budget further, so you can enjoy more family time, without the financial drama.

With positive news about a COVID-19 vaccine on the horizon, many consumers are feeling buoyant heading into the Christmas season.

In fact, consumer sentiment is tracking at a seven-year high, despite 40 per cent of us reporting lost income this year due to COVID-19.

There are mixed reports on how much consumers will spend this year, with some research suggesting business as usual, while others predict we’ll tighten our purse strings.

Traditionally, Aussies are big spenders at Christmas, to the tune of $20 billion on gifts alone! Overspending is commonplace, with many of us failing to plan our spending.

While we all deserve a little Christmas cheer, there’s no point starting the new year with a financial hangover. With that in mind, here are some budget-friendly gift ideas to help you celebrate – without breaking the budget.


1. Set a spending limit
Deciding on a spending limit from the outset will help you stay on track. Plan how much you’d like to spend on each person and keep it reasonable. There’s no harm being open about your budget with family and friends either. This will help to set expectations and avoid any unnecessary anxiety.

Keep in mind as well that everyone has differences in their income, financial commitments and number of people to buy for. So it’s not necessarily a case of setting the same spending limit for everyone.

When you’re planning your budget, spend only what you have available – don’t be tempted to put things on credit. Now more than ever is a good time to spend within your means.


2. Secret Santa
A Secret Santa or Kris Kringle approach to buying gifts can be the ideal way to inject some fun into your celebrations, without blowing the budget. This works especially well for larger groups, friends and colleagues. Just agree a set amount for everyone to spend and make sure no-one gets left off the list!


3. Be kid-wise
Another approach larger families often take is to limit gift-giving to kids only. After all, they’re usually the ones who lack the spending power to buy what they want and get extra excited about the chance to receive gifts as a result.

Managing kids’ expectations at Christmas is also an important way to stop spending getting out of hand. If everyone gets used to seeing a huge pile of presents under the tree year after year, it can get stressful and expensive to keep making this happen.

Younger kids often won’t care about how much their gift costs as long as it’s something they’re excited to receive. And if older kids have let go of the idea of Santa, you can choose to be completely honest with them about your budget. They may get more excited by being involved in