Rein in spending
The Barefoot Investor, Scott Pape, shares five tips to help keep finances in check at the most expensive time of the year.
WITH the silly season in full swing, we caught up with Barefoot Investor Scott Pape to chat about how best to prepare for the most expensive time of the year.
Here are five practical tips from the man himself:
Christmas is not an emergency; we know it’s coming every December even though it may creep up on us.
Plan ahead and factor into your money buckets: my three savings accounts are smile, splurge and fire extinguisher.
It doesn’t mean you won’t overspend, but you have to be realistic.
These days, people can spend a couple of hundred dollars on something they want and it doesn’t require a lot of effort, so I’m more about experiences.
Last year I booked a fishing trip with my Dad and my son; it was three generations and it was good because you couldn’t lose, it was a memory we will have forever – not like that “thing” you get that you forget about.
It was more about the experience rather than stuff.
CUT OUT THE UNNECESSARY STUFF
I’m not tight so I’m not going to say stop buying your latte, but cut from the stuff that makes no difference to your life – bank fees, credit cards, any money that you are giving to a bank.
If you have kids, Christmas is a very expensive time of the year.
Not only do you have Christmas, and everything that comes with that, you have school holidays and then you have school fees to pay for so this time of year is a really, tough for a lot of families.
If you are starting to think about it now, you are in trouble – you have to plan.
Christmas is the most wonderful time of the year but it is one of the most stressful times.
BOXING DAY SALES
These days, we have Singles Day, Black Friday and Cyber Monday sales before Christmas, so it makes sense to buy ahead.
The Australian model is “we are going to leg you right up until Christmas and all the stuff we haven’t been able to sell, we are going to discount on Boxing Day”.
At the Boxing Day sales, you might find a bargain but the idea of waking up early the day after Christmas to fight someone over a discounted microwave is not me.
The better idea would be to go on Gumtree or Ebay and see all the reject presents that people try to sell after Christmas and that’s where you’ll find some bargains.
WHEN YOU SHOULD BOOK THAT HOLIDAY
The majority of families need to go during school holidays, so supply and demand says people are going to pay top dollar.
If you can book 12 months ahead, psychologically you will get more enjoyment from that holiday because it’s something you can look forward to whereas if you buy it last minute a little cheaper, you don’t get as much bang for your buck because you’ve missed out on the anticipation.
Think about it from a kid’s point of view: at Christmas it’s all about anticipation and that’s what you need to do with your holidays.
PLANNING FOR THE NEW YEAR
Look forward to 2019 and be intentional.
Sit back and start to make plans, so you aren’t caught out this time next year.
My book isn’t about getting rich; it’s about making people comfortable with their money.
Barefoot Investor Scott Pape.