Though Christmas should be a time of good cheer, rosy cheeks, cheese platters, pies and wine, for many young adults, it’s also one of financial concerns. The pub trips and parties stack up even before the present buying reaches fever pitch, with all of this rendering January a barren period of budget woes.
So, before you make any lavish gestures or luxury buys this festive season, it’s important first to take a look at your budget, your bank balance and be realistic. With that in mind, here are 5 IDEAL decisions to take before making a big Christmas purchase.
CASH OR CREDIT?
If you are in a position where you can afford to pay cash for that all-important big present without getting overdrawn or spending more than you normally would from an emergency fund, then you should always consider this first. If you’re paying cash, then the purchase should not adversely affect your monthly budget or show up on your credit report; always a bonus, we think.
If you don’t currently have the cash to cover the purchase, try to avoid making large purchases on a credit card wherever possible.
NEED OR WANT?
It’s vital to ask this question of any big purchase you’re making, and not only at Christmas time. Because the difference between necessity and want – both for yourself or a loved one – is significant. Of course, there are always going to be some large items that you need to purchase, like a car or furniture and appliances for your home – but asking this question gives you the chance to step back for a moment and really think about whether the item is something you need, or if it’s a luxury purchase that you simply want.
NOW OR LATER?
If ‘need’ has won the argument but you don’t currently have enough cash to cover the purchase outright, then it’s worth asking yourself if the purchase can wait. Some Christmas gifts don’t actually need to be presented on the day (say, if you’re seeing relatives in the new year, then no harm will be done in delaying it), and may well be much cheaper once the Boxing Day sales, and the rest, begin. It’s a case of supply and demand here, with most gifts being at their peak price prior to the 25th and falling sharply thereafter.
NEW OR SECOND HAND?
Another good question to ask yourself is whether or not you’ll be able to save money by purchasing the item second-hand rather than brand new. Online shopping has opened up the options and diversity of choice in present purchasing no end, with sites like Amazon and eBay, as well as Gumtree and even Facebook Marketplace, offering fully restored, refurbished or brand new quality at second-hand prices. Be scrupulous and diligent in your search, and your patience will be rewarded.
IMPULSIVE OR RESEARCHED?
Finally, when purchasing a more expensive item, it’s important to take the time to thoroughly research the product and the manufacturer or retailer you’re planning to patronise. Spend some time reading trusted reviews online and make sure that you’re aware of any issues related to the product that could affect you or the gift receiver later down the line. Resist the urge to make any impulsive buys off the bat, as these are the transactions which can put a dent in your bank balance. Again, patience is key.