Christmas Budget NZ: How to Plan and Save for Christmas

Christmas is one of the best times of the year, but it's easy for the costs to sneak up on you.

Gifts are the obvious one, but food, catch-ups, travel and all the little extras add up fast. If you haven't planned for it, you're in good company: a Westpac survey last Christmas found only 27% of people had a holiday budget.

The good news? A bit of planning goes a long way. Here's how to set a Christmas budget, spot the hidden costs, save on gifts and the big day, and find a way to pay for it that suits you.

How to Plan and Save for Christmas at a glance

• Start with a list of everyone you're buying for, and what else Christmas will cost you.

• Don't forget the hidden costs: catch-ups, time off work, travel and the little extras.

• Shop around, go in with a plan and get in early to get the best deals.

• Secret Santa, handmade gifts and bring-a-plate can all keep costs down.

• Thinking of borrowing? That's fine too. Just check the repayments fit your budget first.

Start with a Christmas budget

Make a list and check it twice

When it comes to presents, note down everyone you intend to buy gifts for, such as your kids, the wider family, friends, and maybe teachers.

If you have some ideas on what to buy them, note this down too so you can work out the total you'll need to budget for. Remember, you don't always need to spend money on gifts. Handmade goodies or baking can be a heartfelt winner too!

Work out what else Christmas will cost 

Have a think about what else you might need for your Christmas celebrations. A decoration top-up? Travelling to visit family? Factor these costs in too.

This table is a handy way to see it all in one place:

Once you've got a total, compare it with what's left after your regular bills. If it doesn't quite fit, the tips below can help bring it down.

The hidden costs of Christmas

When we think of a Christmas budget, usually we only think about how much we're planning to spend on gifts for our loved ones. But it's often everything else that leaves us wondering where the money went. Here are the extra costs worth planning for.

Festive events

The festive season comes with being extra social and catching up with friends and rellies.

We can't think of a better way to catch up than sharing some drinks and food, whether it's a barbie on the beach, a get-together at home, or trying somewhere new. Unfortunately, social costs add up quick.

Cooking at home is always a cheaper way to go, but allow some room in your budget for a bigger grocery bill as we get closer to Christmas.

Time off and unpaid leave

Taking time off work over the holidays? Hopefully you've got enough annual leave that you won't have a slim pay packet.

If you're taking unpaid leave, that's okay too. Just set aside a bit more money leading up to your time off to cover the basics and the bills until you're back on full pay.

Need a hand with covering your bills over the festive season? Apply now.

Travel and accommodation

If you're travelling over the holidays and your loved ones don't have a spare room, you may need to book a bach, motel or Airbnb.

When budgeting, account for the hidden costs like cleaning, service and linen fees that are sometimes added when you book.

Don't forget your travel costs too, such as fuel, making sure your WOF and service are up to date before you hit the road, and packing your own road trip snacks.

Heading off on a roadie? Check out our best road trip destinations in New Zealand.

Christmas extras

We always find that it's the small Christmas extras that leave us feeling a bit light in the pocket.

We're talking wrapping paper, cards, decorations for your home, and possibly even a new outfit for your get-togethers. Try working wrapping paper and cards into your gift budget, or making your own to keep costs down. Your family will love a handmade card from the kids, and it's a great way to get them involved in the gift-giving too.

As for a new outfit, have a look to see if you can borrow anything from friends or family. You can often find some great items that haven't been worn in a while!

Smart Christmas shopping 

Do your research first

Avoid that feeling of dread when you get to the shops and completely forget what you're there to buy.

Do some research before you head out, and make a list of what you're buying and for who. Set a budget for each person so you know exactly what you can afford to spend. Then check out different stores that sell what you're after, so you know you're getting the best deal and where it's in stock.

PriceSpy is handy for comparing prices, and it's worth a quick search for discount codes or price matches before you buy.

Check out our friends over at MyHome too, to purchase the latest and greatest tech and homeware, with finance options available from Instant Finance.

Go in with a plan

Every successful shopping trip has a well-thought-out plan behind it.

Once you've done your research, make a list of the shops you're going to visit and what you're buying at each one. That way, you'll spend less time in the mall and you'll be less likely to overspend.

Get in early

The earlier you get your Christmas shopping done, the less stressful it will be.

Wouldn't you rather be relaxing with your loved ones in the days before Christmas than hunting for a carpark at the mall?

Some of the best sales of the year happen around Black Friday and the start of December too.

Our Black Friday and Cyber Monday guide has tips for getting a genuinely good deal.

Gifts that don't blow the budget

Embrace Secret Santa

Everyone loves a game of Secret Santa, and this common workplace activity works just as well for your family gathering.

Instead of buying smaller gifts for everyone, each person buys a single gift for one person. That way, the recipient gets a more meaningful gift, and you can put more of your budget behind it.

Before Christmas Day, get everyone to write their ideal gift next to their name. Then ask each person to pick a name from the hat.

They're now responsible for buying a gift for the name they drew. It's handy to set a spending limit so it's a fair exchange.

Want to shake it up? Try the "bad Santa" version, where you can steal gifts from each other as you go!

Quality over quantity

Quality over quantity applies to Christmas gifts too.

Instead of buying a gift for each individual family member, think of gifts your aunt and uncle could both enjoy as a couple, for instance. It shortens the shopping list and can save you money too.

Gifts don't even have to be things. A meaningful experience, like a zoo pass for a toddler, might be more gratefully received by their parents than another toy.

Make some gifts by hand

Not only do homemade gifts save you money, they also go down a treat! Nothing shows how much you care more than something you spent time on.

Get creative in the kitchen with cookies, cakes and muffins (festive cookie cutters and icing with people's names are a winner), or put together a scrapbook of shared memories or a hamper of someone's favourite snacks.

Start by thinking about what your friends and family really love, and how you could make it at home.

Gift ideas by budget

• Under $20: home baking or a jar of homemade fudge, a framed photo print, a plant cutting in a nice pot, or a handwritten voucher for babysitting or a home-cooked dinner.

• Under $50: a book, a board game or puzzle, a movie or mini-golf outing, or a hamper of their favourite snacks.

• Under $100: an experience like a zoo pass or event tickets, something good-quality they'll use every day, or a group gift you chip in for with others.

 

Saving on Christmas Day

Bring a plate

Christmas dinner can push the budget up! So whether you're hosting or off to family, why not suggest everyone brings a dish?

With a little planning (not just potluck style), you can share the cost and the hard work, and still have a Christmas spread to remember.

Here's how you could split up the menu:

• Nibbles to start: chips, dips, cheese and nuts

• Meat: roast chicken or ham is our go-to!

• Roast veges: you can't go past some Christmas Day potato and kumara

• Salads and sides: you might need a few of these, so split them up between the family

• Dessert: a classic pavlova, or is chocolate mousse more your style?

• Drinks: ask everyone to BYO

Choose time over money

We all know it's the thought that really counts, so why not skip the gifts and spend some quality time with your loved ones instead?

Invite an old friend for dinner, take your grandma for a picnic, or go for a walk on the beach and catch up.

Borrowing for Christmas 

If you'd like a bit of extra help to cover Christmas, borrowing is a perfectly good option, as long as the repayments fit your budget.

• Already with us? You may be able to top up your existing loan, so you still have one loan and one repayment.

• New to Instant Finance? You can apply for a personal loan from $500 to $50,000. Interest rates range from 9.95% to 29.95% p.a., depending on your circumstances.

Our guide to Christmas loans covers both.

Weighing up a loan against buy now pay later for your gifts? Our personal loans vs buy now pay later guide compares them side by side.

Before you apply, our five questions to ask before you borrow can help you work out what's comfortable.

With Instant Finance, once you're approved, the money is in your account within 24 hours.

We won't let you get in over your head. We'll always go through your budget with you to make sure the repayments fit.

Already overspent? Our post on what to do if you've overspent at Christmas can help.

Terms and conditions, and responsible lending criteria apply.

Start saving for next Christmas

It might seem early, but putting away a small amount each week adds up quickly.

Around $20 a week gets you to $1,000 in a year. Some people keep it in a separate savings account so it's not mixed in with everyday money, and several supermarkets, including Woolworths, New World and Pak'nSave, run Christmas clubs where you can put money aside for your Christmas groceries.

Christmas budget FAQs

What's a normal Christmas budget?

There isn't really a "normal" amount. It depends on your household, who you're buying for and how you like to celebrate. A good Christmas budget starts with what's left after your regular bills, then splits that across gifts, food, events, travel and extras. Our budget table above is a good place to start.

How much should I save each week for Christmas?

Divide the amount you'd like to have by the number of weeks until Christmas. For example, $1,000 over a year is about $20 a week, or about $40 a week over six months. If you're aiming for $5,000 over a year, that's about $96 a week.

What do I do if I have no money for Christmas?

You've got more options than you might think. Secret Santa, homemade gifts and a bring-a-plate Christmas lunch can keep costs right down, and talking to family about a smaller Christmas can take the pressure off everyone. If you'd like to borrow, a personal loan is an option as long as the repayments fit your budget. And for free budgeting help, MoneyTalks is a great place to start.

How do I budget for Christmas?

Start by listing everyone you're buying for and what you'd like to spend on each. Then add the other costs, like food, events, travel and extras such as wrapping and decorations. Compare the total with what's left after your regular bills, and adjust until it fits. Then keep track as you shop so you can see how you're going.

How can I save money on Christmas gifts?

Try Secret Santa so everyone buys just one gift, set a spending limit, and think about handmade gifts or experiences instead of more things. Shopping around and timing bigger purchases with sales like Black Friday can help too.