If you want to avoid a financial hangover heading into the new year, it's important to plan your spending, experts say.
Christmas is about spending time, not money - but it can be easy to get caught up in the last-minute rush and spend more than we should. This is where unwanted debt can creep in.
EnableMe director Hannah McQueen and money mentalist Lynda Moore share ideas on how to avoid a financial hangover, based on the three most common areas of overspending: food, gifts and entertainment.
1. Share food costs
During the festive season, there's often extra people to feed and more expensive items to buy, such as ham and other meats, champagne, and special ingredients.
While food is a big expense throughout the year, during the festive season, food bills can double, McQueen said.
To keep costs down, be realistic about how much food is required and plan accordingly. Work out what each person will bring and "share the load".
"Sharing the duties of making dishes between family members can really help to reduce the cost and the effort, without compromising on the deliciousness of Christmas Day," she said.
2. Plan your gifts
While many have got their Christmas shopping done, COVID-19 restrictions have made it harder to plan ahead.
If you find yourself rushing around on Christmas week, it's worth spending a few minutes writing a list and setting a limit on how much you'll spend.
"Not mapping out your overall spending, how much you’ll spend on each gift, and what you can buy that fits within that range, is a recipe for going overboard," McQueen said.
And don't forget all those small bits and pieces - wrapping paper, ribbon, gift cards - add up. Consider buying them from discount stores and incorporating what you already have at home.
While generosity is an admirable quality, there are other ways to show people you care about them than spending money. Consider making last-minute gifts at home, such as baking, a 'memory jar' or a book of redeemable vouchers.
Remember, it's the thought that counts. Sometimes less is more.
3. Limit your RSVPs
While many of us are keen to celebrate the end of a challenging year - and new freedoms under the COVID-19 traffic light system - it is important to consider the full cost of going out.
"The cost of the drinks, the food, the taxis, the late-night drive thru - and the babysitter - can really add up," McQueen said.
If your budget is limited, you could plan which events to attend. In some situations, there could be an opportunity to suggest cost-effective alternatives - instead of dinner and a movie, why not coffee at the park?
People often feel obliged to give a reason, but often, a simple, 'No thanks, let's catch up in the New Year', is enough", Moore added.
If despite your best intentions, you wind up with unwanted debt, your best strategy is to realise it's happened and make a plan to pay it off.
Moore suggests calculating what you've spent over and above your normal monthly spending (compare December and/or January to a typical month).
Using a 'normal' month of spending as a guide, identify areas of discretionary spending where you could cut back to get on track. In other words, go on a 'spending diet'.
If there's debt on a credit card, there's the option of shopping around for offers where no interest is paid on the transferred balance for a certain period. If you choose this option, make sure you cancel your old card - and don't put new purchases on the new one.
"Shop around and see if any banks are offering a new credit card that is interest-free for a period of time. Then transfer the balance, cut up the card and spread the payments over the interest-free period," Moore suggested.
As it is easier and more-cost effective to plan ahead, why not look after your future self and make this a goal for 2022?
"If you know how much you want to spend in 12 months' time, make a decision now (or as soon as you are back in the black) to transfer a fixed amount each time you get paid to a Christmas savings account," Moore added.
"This time next year, you'll feel so much better if you do."
