How to budget for Christmas

Allison Lloyd, 35, has a knack for creating a sleek, beautiful and highly organised Christmas without blowing the family budget.

You’d have to take a sleigh ride to the North Pole to find a more organised Christmas shopper than Allison Lloyd, 35. The mother of two buys wrapping paper in January and Christmas presents at midyear sales. She also prides herself on never paying full price for anything.

“I love Christmas. It’s such a special time of year,” she says. “I love everything to do with it – the lead up, the atmosphere and the decorations in the stores. I always look forward to Christmas in terms of getting together with family. But I’m also a shop-a-holic so the opportunity to buy presents for people is very exciting.”

For Allison, Christmas is about attention to detail, careful planning, budgeting and lots of lists. Although she’s always on the lookout for a bargain, Allison really sets her mind to Christmas during the mid-year sales. “I know what people like, and the colours they like, and I always try to buy them something practical that they can use,” she says.

An avid window shopper, Allison rarely jumps at a purchase on first sight, unless she’s positive it’s being offered at the lowest possible price. More likely, she’ll note it down on her “progressive” Christmas shopping list and hunt around for it elsewhere at a better price. Or she’ll wait for it to go on sale.

“Most shops have rolling discounts throughout the year,” says Allison, “so when you find something, you really just have to wait for it to come on sale. You can usually get something at least 15 per cent off, sometimes 25 per cent. I rarely pay full price for anything. You can get everything discounted – you just have to be patient.

“But you do have to get in early for the bargains because stores don’t have the same sales when everyone is in the shops closer to Christmas,” she adds.

Allison has had to hone her shopping skills even further since the birth of her first child. Now on a career break from her job as a bank manager, and looking after Annie, four and Sam, six months, the family lives on one wage from husband Michael, 35, a teacher.

“We’re on a single income now, so we do have to watch our money. I think about when we were on two incomes and I wonder where the money went. When there’s only one income coming in you get used to budgeting and never paying more than you have to,” says Allison.

Allison’s Christmas financial strategy begins just days after the last piece of tinsel has been thrown in the bin and there’s still Christmas cake in the cupboard. She buys good-quality wrapping paper and cards in the post-Christmas sales when discounts reach as high as 75 per cent.

“Like anyone, I find it hard to think about presents straight after Christmas, but then purchasing wrapping paper and cards is not really an onerous task,” she laughs.

An advocate of quality over quantity, Allison then budgets $50 per person and buys about 20 presents. She estimates that she spends at least $1,000 on gifts, but never feels a financial burden because she spreads her buying throughout the year.

“I think Christmas isn’t all about gifts. I think if you’ve put a lot of thought into it you don’t have to buy multiple gifts to impress people, especially if it’s nicely wrapped and presented with a beautiful card,” she says. “I shop in places such as David Jones or take a trip up to Sydney before Christmas to go to Peter’s of Kensington. I really try to stick to my budget. If I go a couple of dollars over for one present I don’t worry, but if it is starting to look like $10 or $20 over then I’ll just look for something else.”

Allison also looks for two-for-one deals or ‘buy one shirt and get another for 50 per cent off’, which she’ll then give to people on different sides of the family. “It’s a very expensive time of year with the gift buying and travelling and holidaying and you have to do what you can to cut costs,” says Allison, who also paid half the cost of her summer holiday upfront to spread the money burden.

Cash is king for Allison, who rarely pays for anything with her credit card. She does use an American Express card, firm in the knowledge it has to be paid off in full at the end of each month. “It’s so easy to go overboard and then you regret it later when the credit card bill comes in. I know some people really ride their credit card at this time of year, but the fees are so high it can mean paying $70 for a present that really only cost you $50.”

Allison admits her biggest challenge in recent years has been putting a limit on presents for her children. Rather than cap the amount she spends, Allison buys small gifts throughout the year and stops when the children’s Santa pillowcases are full. Quality is still the overriding principal for Allison who refuses to buy junk or cheap plastic toys for the children. She opts for good-quality books and wooden toys that will last. “I buy lots of craft and art supplies they can use with their hands. I’m a bit of a traditionalist when it comes to those things,” she says.

Another Christmas tradition is buying one expensive tree ornament a year. It’s the one time Allison forgoes a bargain, buying at peak Christmas time when ornaments are at their most expensive. “I buy just one, but I like buying it at Christmas rather than afterwards. I've collected a lot over the years, really good-quality ornaments. I now have two plastic tubs full,” she says. “I might buy a Waterford decoration that costs $50. I have about eight of them now. I couldn’t afford to go out and buy a whole set at one time, but because I’m doing it just once a year I don’t notice the money, and neither does my husband!”

Like anything of quality, Allison appreciates the fact the beautiful twinkling ornaments will probably outlive her, and will hang on her children’s Christmas trees year after year, a reminder of many happy Christmases passed.