Christmas is round the corner but just because it's the season for giving and being jolly is no reason to get carried away and pile too much on our plastic.
So to ensure you don't get a festive hangover in the form of a huge credit card bill, here are eight tips to rein in your spending.
1. DRAW UP A DECEMBER BUDGET
With retailers going into top gear for the festive season, we are in danger of losing our "dollars and sense" if we do not self-impose some money management parameters.
It's prudent to decide upfront how much to set aside for expenses such as Christmas gifts, the party buffet, decorations and the year-end holiday.
I've developed a habit of instinctively looking out for gifts that would be unique and suitable for my family and friends when I'm window shopping, especially during discount sales and when I travel. These gifts come in handy for Christmas, and it helps me avoid a huge spike in year-end spending.
Sticking to our budget will help us spend within our means and still have some of that annual bonus left over.
Avoid touching the emergency cash, which is recommended to be at least six months of expenditure for rainy days. Christmas gifts do not count as an emergency, no matter how much the kids plead.
2. USE REWARD POINTS
I typically accumulate my credit and loyalty cards' reward points and use them to finance my year-end spending on treats and gifts to lessen my financial burden during December.
And by checking on my points regularly, it is a constant reminder to utilise them before they expire.
Last year, my friend Joe Tan was devastated when he realised too late that he had neglected to claim 700,000 Krisflyer mileage points before they expired.
He had painstakingly accumulated them by his spending on two cards since 1995. At 59,000 mileage points for a round trip to London, he could have gone there 11 times.
3. START EARLY
The many years of being stressed out by the crowds during last-minute Christmas shopping sprees have taught me the value of starting early.
I've developed a habit of instinctively looking out for gifts that would be unique and suitable for my family and friends when I'm window shopping, especially during sales and when I travel. These gifts come in handy for Christmas, and they help me avoid a huge spike in year-end spending.
I use my mobile phone to keep tabs on the gifts I have bought and for whom. This way, I can enjoy the Christmas atmosphere much better, and I feel more relaxed as the yearly family gathering looms near.
4. BUY 'NEEDS', NOT 'WANTS'
Be careful not to throw caution to the wind: Ask yourself if the purchase is a "want" or a "need" before approaching the cashier or clicking the "buy" button.
It is easy to fall prey to the many Christmas promotions amid the festive events which are planned to entice shoppers.
Never make a purchase because of freebies as there's no such thing as a free lunch. Track your budget, be disciplined and resist the temptation to buy unnecessarily.
5. SHOP AROUND
Look around for good deals, including online, and compare prices first.
If you are planning a family gathering and need to order Christmas goodies or a buffet, do it early to take advantage of early-bird discounts. Note that you are unlikely to get a discount for your buffet on Christmas Eve and Christmas Day but it is usually still available the weekend before.
Last month, I ordered my Christmas buffet from a caterer and although it didn't offer a discount as my party is on Christmas Eve, a log cake was thrown in for free.
6. PLAY 'SECRET SANTA'
This is a useful and cost-effective game for colleagues, friends and families.
Let's assume you have 20 colleagues. Instead of buying 20 gifts, everyone picks a name and acts as the "secret Santa" by buying one gift for that person. A cap to the cost of the gift is also decided ahead. That is a lot of savings.
You may also wish to dispense with gift exchange for every family member. Instead, choose to donate gifts to the needy and, in the process, the act becomes a valuable lesson on charity and giving.
7. AVOID DEBT TRAP
Keep a check on how much you are putting on your plastic to avoid over-spending or busting your credit limit.
If you are spending via credit cards, be sure to pay your bills in full each month. Avoid rolling over your balance and accumulating debts at what is a sky-high interest rate of 24 per cent a year.
For instance, if you have a credit card bill of $10,000, the interest payable at that rate for six months is $1,200, plus any late finance charges you may also incur.
8. SPEND QUALITY TIME
When you can control your budget, you will have greater peace of mind to enjoy the festive season.
Many of us forget that what our loved ones really desire is our quality time. Our love for them need not be measured by the cost of our gifts.
So make the effort to connect and make more precious memories together this Christmas season.
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