Plan ahead now to stay debt-free over the holiday period. Plus see how little budgeting advice has changed with our look back at tips from 1968.

Set a Christmas budget: Work out in advance what you’re likely to spend over Christmas and the holidays. If there’s not enough money coming in, look at where you can cut back:

• agree with the “rellies” to buy presents only for the kids
• have a weekend away rather than two weeks
• skip the Christmas ham this year.

Budget for the year: Build on the holiday budget as the budget for the year. Set some clear goals:

• repaying your credit card
• saving for a winter holiday in Oz
• buying the kids bikes next Christmas.

Prune spending: Look for expenses you can cut out or prune, so you can have a bit left over every pay to put towards your goals. Target impulse-buys and non-essentials. You can also make good savings by shopping around for “essentials” like power, phone services and groceries.

Look for useful accounts: Most banks offer non-fee online-only accounts for regular saving. From some online transaction accounts you can download your income and spending into spreadsheets – and then check this info  against your budget.

Use the internet: There are several good Kiwi online budgeting websites (all these sites have some free content).

Prepay: Prepay some of the larger holiday items: the motel booking or the cattery fee. See if you can prepay your phone and power bills or annual insurance bills.

Shop ahead: Start pressie shopping early in December – and don’t miss out on any pre-Xmas sales. Also buy additional non-perishable grocery items on each pre-Christmas supermarket trip: that means you won’t have a groaning trolley (and bill) on Christmas Eve.

Retro budgeting

We’ve looked through our magazines for the past 50 years and come up with bits of advice that are as useful now as they were then. So try these wise words from 1968 in your budgeting plan for the coming year.

What’s the problem?
“It is a sad and curious fact of our society that so many families with modest, but adequate incomes fail to live within their means because they spend unwisely … This may be caused in part by the general impression people have that anyone knows automatically how to spend money; all he needs to learn is how to make it. This is quite untrue.”

Set a budget
“The essential thing is to decide your goals (know what you want), then work out your income (what you have), and decide how to balance your wants against your needs. Unless priorities are established first, you will have no way of choosing between the many claims made on your income … unless you have something to aim for, all of your income may be used up in living expenses. These goals are the essential thing.

“To keep careful track of your money, rule up an exercise book with enough columns to record all types of expenditure. Enter the weekly figures for food, fuel, clothing, etc. under the appropriate headings. Your budget material should be kept separate from all other papers – say, in strong folders kept in a special drawer. You should also keep with your budget material a large calendar on which you can make the dates when payments fall due.”

Emergency funds
“In all cases an emergency fund should be established. Without an emergency fund a good budget can be destroyed by illness, by temporary unemployment … or by unexpectedly large bills - such as severe gearbox trouble in the family car. The experts recommend that an amount equal to from one to three months’ income should be accumulated by regular deductions each pay period.”

Smart spending
“Try a number of shops, watch the advertisements, become familiar with the variations in prices. Last year one of our officers saved $1.14 on a grocery order of just under $10 by 'shopping around' several chain stores.

“Before setting foot outside the door you should arm yourself with a shopping list and preferably a pair of blinkers. A shopping list is the only known antidote to that arch enemy of budgeting – impulse buying.”

More help

• Powerswitch - compare electricity and gas prices
• Budgeting websites - we found 4 excellent Kiwi sites
• Supermarket prices - our annual survey 

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