Five tips from the Barefoot Investor on how to stay (financially) sane at Christmas

Stock image.
Stock image.

WITH the silly season well and truly 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’s five practical tips from the man himself:

Be prepared

Christmas is not an emergency, we know it’s coming every December even though it may creep up on us.

Plan ahead, and ask yourself is this something that I’m factoring into my buckets (Pape’s three savings accounts – smile, splurge, fire extinguisher)?

In saying that it doesn’t mean you won’t overspend, you have to be realistic about it.

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 that 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’ve got kids, Christmas is a very expensive time of the year – not only do you have Christmas and everything that comes along with that.

You have school holidays and then you have school fees so this time of the year is really tough for a lot of families and if you are starting to think about it now, you are screwed.

Again, you also have to plan for it.

It is the most wonderful time of the year but it is one of the most stressful times of the year.

Barefoot Investor Scott Pape.

Boxing Day sales

These days we have Singles Day and then Black Friday and Cyber Monday sales and that’s all before Christmas so it makes sense.

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 to 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 it 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 it’s the anticipation.

Think about it from a kid’s point of view at Christmas, that’s 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 don’t get caught out this time next year.

My book isn’t about getting rich, it’s about making people comfortable with their money.