With 3 months to go ‘till Christmas, it might seem a little too early to be thinking about what to buy, but nothing could be further from the truth. In reality, you have just enough time to save yourself from taking on a pile of expensive debt!
Christmas is an expensive business. Irish families are estimated to spend a whopping €2,000 or more on Christmas. For a select number of families, Christmas may be a breeze but for many, it can lead to significant overspending. And to make matters worse, for those that borrow to pay their way, Christmas will cost a whole lot more when the expense of interest charges are added on, regardless of whether they borrow from their bank, credit union or through the convenience of a credit card. In fact, on this point, if they use a credit card to fund their way, that €2,000 Christmas spend will cost an additional €2,800 in interest charges alone (based on an 18% rate of interest, 2.5% / €5 minimum payment threshold). In other words, Christmas 2018 won’t end up costing €2,000; it will actually cost €4,800. And to put the icing on the cake, it could take up to 24 years to repay meaning that Christmas 2018 would still be part of the family budget in 2,042. Ouch!
So, best to invest a little time and look for ways to save some cash! With 3 months to go, time is on your side! Here goes:
Dine for less – If you eat out, STOP! It’s killing your budget! Breakfast, lunch, dinner or all of the above! Here, it’s easy to save €7 per day on just lunch and snacks by bringing a packed lunch. So, cut down, cut out and cut back on snacks, lunches and eating out. At 5 days per week, that’s an easy saving of €420 over the next 3 months!
Wipe out the waste – Irish households are estimated waste between €400 – €1,000 per year on unused food. So, let’s split the difference and call it €700. On a monthly basis, this works out to €58.33. Multiply that by 3 months and it could add a significant €175 in your Christmas fund.
You are over half way to your €1,000 Christmas goal. Keep it up!
Claim your rights – every year, hundreds of millions of Euro on medical expense refunds go unclaimed. The reason: people simply don’t file. And the value of those refunds is estimated to be worth between €130 – €300 per household. Families could be looking at an easy €200 refund. For your Christmas fund, you are now coasting to €795 saved!
Drive for less – Irish motorists drive about 17,000km per year. So, if we just apply the benefit of shopping around for lower fuel prices, the average driver could save in the region of €50 over a 3-month period by simply using one of the online fuel comparison sites that display petrol and diesel prices locally, regionally and nationally. You have just driven your savings up to €845.
Reduce the booze – Alcohol (and other spending). According to the Central Statistics Office, the average Irish household spends about €28 per week on booze and cigarettes. So, while we are not advocating total abstinence, we are suggesting a 50% reduction which would net savings of about €168 over the 12 weeks to Christmas. Nice! It also means the Christmas fund is now a cool €1,013. You have reached the goal.
But there are still more ways to save
Moderate the gambling – As a nation, Irish people lose on average €470 per adult per year. This works out to about €118 over a 3-month period which if doubled is a crazy €236. In fact, that gambling loss statistic relates to online gambling, not monies spent on National Lottery gambling. Here, a simple play in the National Lottery costs €4. For families that play twice per week, this adds up to an additional €96. If two people in the household play, the figures and potential savings top a whopping €192. So, if we factor all gambling spends families could save a massive €428 over that 3-month period.
Total savings potential for Christmas = €1,441.
Check the gaming – this is not a new phenomenon but it is a relatively un-discussed one. Recently, while assisting a family with their chronic lack of available funds, they said they felt constantly “broke”. After examining their Income and Expenses details, I pointed out that the monthly spend of between €300 – €500 on online gaming was the cause of their ongoing financial difficulties. It was a spend they found difficult to wean their children off, which is why they were hopeful their bank would extend mortgage forgiveness. They didn’t!
Making money and spending visible – the trick to good money management is through making spending visible. It is easy to forget what we spend if we fail to carry out periodic checks on how we spend. At a minimum, an annual spending review is a great way to check how we manage our money. It is especially important if there are important financial goals.