It amazes me, as a financial adviser, how many people say to me, ‘Christmas snuck up on me this year!’  Did they change the date? Did I miss the memo?  Christmas is still December 25 isn’t it?   What I think they mean is that they have not planned for the expense of Christmas this year.  The same can go for car rego or insurance or birthdays or clothing or holidays!

Having a cash flow plan is the first step to successful financial management, the second is being disciplined and staying accountable to your planned expenses.  I admit it is hard these days with all the advertising trying to get us to spend our hard earned money on ‘stuff’ and ‘things’.  We all know people who suffer from what I call ‘chronic-not-enough-ness’.  Always needing to buy the latest and greatest.  This isn’t bad if you can afford it, but often leaves people stuck on the tread-mill of debt and repayment which builds and builds to a point which sometimes gets a little overwhelming.

It reminds me of the quote from Fight Club:  ‘Advertising has us chasing cars and clothes, working jobs we hate so we can buy things we don’t need.’ This Christmas I challenge you to do things which are meaningful but don’t leave you with the credit card hangover.  Then for Christmas 2010, decide on your spending amount for Christmas and set up a bank account which has no ATM access, for which you can set aside a fortnightly amount.  

When you start shopping for Christmas, do as Santa does and make a list, check it twice, set aside an amount for each present and go shopping with the ‘purpose in mind’, rather than just ‘money in hand’.  I have one client who does all their Christmas shopping in January the year before during the sales — Now that is planning!

Enjoy the silly season and remember a ‘plan’ is as good as a holiday!   I may have that a little confused but a plan will ensure you can enjoy your next holiday!

Scott Malcolm is Director of Money Mechanics (ph: 02 6257 5557) who are authorised to provide financial advice through PATRON Financial Advice AFSL 307379.

The information provided on this document is of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs.  Before acting on this information you should consider its appropriateness having regard to your own objectives, financial situation and needs.