I can’t believe that I’m writing this but it’s less than three months until Christmas. Just getting that sentence down makes me feel a little ill at the thought of everything I want to achieve and complete before the year finishes but it also makes me feel queasy because the lead-up to Christmas for many of us is incredibly busy and let’s face it, downright expensive.

There are so many catch-ups with friends and family before the big day, numerous presents to buy, a new outfit or two to purchase and more than one bottle of champagne to take with you if you’re a Christmas function guest. Never mind the cost if you’re the host of either Christmas day itself or drinks before the big day.

When it comes to presents and functions, I know many of us want to be generous at Christmas to those who matter to us. That’s because we’ve bought the story that has been sold by Hollywood and Hallmark that it’s the season to show those you love just how much you love them. And of course the more you love someone, the more you’d want to spend on them, right? Wrong!

I believe if you truly cared for someone you wouldn’t want them to get into financial difficulty through a misguided act of showing you how much they love you. I also believe if you asked your kids to write down all the presents they received last year they couldn’t. They might be able to list their top five but I bet that’s it.

That’s why I’m an advocate for sitting down three months out (which is now) and working out a budget for the silly season so you don’t find yourself in financial difficulty once the tinsel is packed away.

Of course I know some of you are going to be thinking, how incredibly unromantic that sounds: writing a list and setting a budget. You can’t put a price on love!

Well actually you can. It depends on how much you have available to spend and how much you can save up between now and Christmas time.

Maxing out your credit cards and being unable to pay off the balance until halfway through the year or spending all your savings and jeopardising long-term plans is not showing yourself kindness. Surely it’s time this year to give yourself some Christmas love by keeping your spending in check and starting the new year on a great financial footing.

So if you, like many of us, struggle at Christmas time to keep your spending under control, why not start now with me to ensure that this year is the best year yet, financially and festively. Here are my top seven tips for having a financially festive Christmas:

  • 1 Write a list for everyone you want/need to buy for and put an amount next to each person’s name and then total the amounts. If the amount is not realistic or is more than you are able to spend then consider culling your list or reducing the individual amounts.
  • 2 Consider talking to your friends and family and either putting a limit on the amount you are going to spend on each other or organising a kris kringle where you purchase for one person only.
  • 3 Talk to your kids about the budget you have for them this Christmas and ask them to consider presents within the budget or explain that with so many kids in the world Santa has had to put a budget on presents this year and the limit is X amount. Or if they want a pricier item then start searching now on eBay or other secondhand sites. It’s never too early for kids to understand that there isn’t a never-ending money tree that presents simply appear from.
  • 4 If you as a grown-up genuinely don’t need anything (which let’s face it, is many of us) why not as a group of friends or a couple decide to donate the amount you would have spent to charity and then buy something silly and cheap for each other instead
  • 5 Write a list for each function you are hosting including a budget for all food and alcohol and make sure you stick to it. Prepare menus and start shopping for items now so the big Christmas food shop cost is reduced.
  • 6 Consider asking guests to bring either nibbles, dessert or alcohol to help reduce the cost of the big day or other functions you maybe holding. That way the cost and the time in preparing and shopping can be shared.
  • 7 Start now. Once you’ve made your lists, start buying now to spread the cost across a few months rather than a week. But don’t be tempted to lift the limit on the presents or hand them over early – find a great hiding space and tick them off.

Christmas can be a wonderful time of year but it can also be financially devastating when the new year hits. This year if you really want to show how much you love them through how much you spend, why not make that “person” a needy family or a charity and do something meaningful with the ones you love instead. Now that would be a worthy hallmark moment.

Posted by Melissa Browne – Money Manager (Fairfax Digital) on 1st October, 2014