A Mortgage Mentor Guide to Holiday Budgeting.  

With Christmas lights and carols due to make a proud appearance, the festive season is fast approaching alongside an inevitable increase in household spending.

With many budgets already stretched, making a holiday budget is arguably more important than ever – after all, nothing washes away the magic of Christmas faster than the reality of overspending.  

At NZHL, we believe the first step to healthy finances is advanced planning – in this blog, we look at what you need to consider when setting your holiday budget. 

Start with the basics.

Income: do you have enough annual leave to cover time off work, or will your income dip over the holiday season?  

Or, in industries such as retail or hospitality – is there potential for additional income? 

Everyday expenses: are there costs which will reduce over the holidays? This could be sports, recreational activities, or childcare which may have a shutdown period, or perhaps your petrol usage will drop.

Additional essential expenses: will you need to pay for school holiday programmes or an increase in power, gas, and water bills with family being home or holiday guests?

Do you need to set more aside for your food bill?

Once budget variations are calculated (as accurately as possible) you can determine your budget for festivities.  

Budgeting the fun stuff

Determining how much you can (and are willing to spend) can be tricky – with the ready availability of buy now pay later payment options and credit cards it’s easy to lose track – particularly when having fun!  

This is why it’s best to set aside a safe realistic spending amount and decide in advance how to pay for and keep track of your spending.

Fun fund considerations:

Travel: are you planning a great Kiwi Road trip or visiting family overseas? Consider how much you will need for petrol or airfares, accommodation, and spending money – don’t forget food and entertainment! 

Are there additional costs – a car service or car hire, new passport, vaccinations, travel insurance?  Presents: no one wants to skimp out on gifts, but setting a realistic spending limit is crucial for keeping your budget under control. 

When looking at your gift list, you first need to consider how many people you are buying for and how much you will spend on each gift. If your gift list is too long, consider shortening it where you can – sometimes your presence is gift enough. 

Entertaining and entertainment: are you planning on hosting a gathering or two? What will your guest list look like and what will you need to feed and water your guests?  

If you prefer to go out, what would you usually spend, and are there any special events you plan to attend (festivals, shows, tours, and the like)?

Ideally, your ‘fun budget’ should be within your surplus – the money left over after your essential expenses.

Before deciding to spend outside your overarching budget (with additional debt or savings) consider the impacts over the coming months and on your longer-term goals (like paying off your home loan).

Once you have a realistic fun fund, it’s time to allocate taking into consideration your plans above.

Sticking to budget

You can have a detailed budget right down to the dollar, but it won’t matter if you don’t stick to it. 

This is particularly challenging in the advertising push leading up to Christmas. While you may not be able to avoid the temptation of advertising, you can ignore anything that doesn’t fit within your budget and focus on finding something that does. 

NZHL has tools to support our clients in taking control of their finances and staying on track. 

If you aren’t an NZHL client, you can try an online budgeting tool, or spreadsheets to map your income vs expenses and festive budget. 

Staying on track with NZHL 

At NZHL, your financial freedom is our highest priority, so we’re here to help for the life of your loan. 

It’s all about planning – by establishing your take-home income and average monthly expenses, we can help you plan to reach new goals, such as a new car, renovations, and, of course, a festive holiday season. 

DebtNav is NZHL’s unique online monitoring and debt management tool – allowing you to see the impact these goals and the additional spending will have on your finances, helping you make informed decisions and adapt your plans to continue working for you. 

And should you find yourself in a situation where you have overspent, DebtNav (alongside your Mortgage Mentor) can help you visualise your financial situation and determine what you need to do to get back on track. 

Considering a switch from your current home loan provider? Check out our Mortgage Calculator to see how much you could be saving and what could be possible with NZHL

Please note –This blog is intended to be general in nature and should not replace personalised financial advice by your mortgage adviser.