Eight ways to practise financial self-care this Christmas

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The silly season is well and truly upon us, and while this time of year is traditionally associated with joy and celebration, all feelings at this time of the year are exaggerated.

If you’re surrounded by beautiful friends and family, December turbocharges the joy. The same goes for the feelings we’ve had around money: the month of December really drives home that we’re maybe not in the best financial situation, or that we’re struggling a bit to keep on top of our budgets.

Amidst the holiday hustle, we’re actually in the perfect position to conduct a comprehensive financial audit.Credit: Dionne Gain

So as we continue to gear up for this festive season, we also need to look after ourselves a bit more than usual – personally and financially – because wellbeing is holistic. While Christmas cheer may tempt us to loosen our purse strings, the reality is that Australians are facing increased financial strain due to rising costs of living.

According to a recent Finder survey, the average Australian is projected to spend $1479 this Christmas, marking a 9 per cent increase from the previous year. With a national holiday spending estimate of $30 billion, managing expenses during this festive period is crucial to avoiding undue financial stress.

Amid the holiday hustle, we’re actually in the perfect position to conduct a comprehensive financial audit – the ultimate form of self-care this festive season if you ask me. Here are all the things you can do before January 1, 2024 to ensure you’re stepping into the new year in the best way possible.

Taking control of your financial wellbeing now can help to alleviate stress and pave the way for a merry and bright 2024.

1. Conduct a financial audit and shop around. Reviewing all outgoing costs, from utility bills to recurring subscriptions, allows for a thorough assessment of where money is allocated. Identifying areas for potential savings can be empowering, especially when each dollar saved contributes to building financial resilience.

2. Build up an emergency fund. In a year when the cost of living has surged and financial pressures have escalated, one key resolution is to build or replenish an emergency fund. With uncertainty in the economic landscape, having a safety net is paramount.

I always get asked “How much should I have in my emergency fund Victoria?!” and the answer is going to vary depending on your situation – ideally start with a fund that can cover three months of your expenses and grow from there. It will look different for everyone.

3. Ditch the ‘it’s not worth it’ attitude. Together we will dispel the notion that small savings aren’t worth the effort because from little things big things really do grow.

We all too often underestimate the impact of consistent, even modest, contributions to savings. Every dollar saved is a step toward financial security, and adopting a proactive attitude, regardless of the amount, sets a positive precedent for future financial habits. Future you is absolutely going to thank you.

4. Smash down debt. As the year draws to a close, addressing outstanding debts becomes a priority. Credit card balances, in particular, should be diligently managed.

In a perfect world, you’d be able to completely clear it every month, however that’s not the reality for many people right now, and that’s okay – you’re doing the best you can right now and need to remember that this is just another season of life.

Don’t be too hard on yourself about it, but definitely don’t bury your head in the sand and pretend it’s not happening because that’s when debt starts to take over and snowball more.

5. Make the most of the higher savings rates on offer. With interest rates at an all-time high, making the most of higher savings rates makes a lot of sense. Whether starting a new savings plan or reassessing existing funds, seeking out accounts with competitive interest rates ensures that your money works more efficiently for you. Maintaining a clear distinction between emergency funds and general savings helps avoid dipping into essential reserves.

6. Create a budget. Budgeting often gets a bad rap for being tedious and restrictive, but in truth, it is a powerful tool for financial empowerment.

Creating a budget, whether through online tools or a pen-and-paper approach, offers a holistic view of income and expenses. It fosters a sense of control and clarity, making it easier to set financial goals and track progress. One of my favourite websites is MoneySmart, where they have a basic and free downloadable budget to get you started.

7. Review your mortgage. As we approach the new year, it’s also an opportune time to review mortgage arrangements and now’s the time to check in with your broker and see what they can do to help you get the best deal.

Thankfully, the RBA didn’t increase rates at their last meeting (thank you!) and they won’t be able to again until February (win!) because they don’t meet in January. So take some time to check out your mortgage or ask your broker to do a health check to ensure you’re in the best possible position coming into 2024.

8. Check in on your superannuation. Another year older another year wiser they say – and it would be a wise decision to check in on your super fund to ensure it’s tracking away nicely.

The Australian government have a very helpful tool called YourSuper, which is a comparison tool helps you compare super funds based on their fees and performance. You can also see how your personal super fund compares against others within your myGov account – all for free, and all in a completely non-biased way.

My favourite thing about this website is that they share the top and bottom performing superannuation products, which Your Super will ensure superannuation funds are more accountable for how they spend your money – and will give you the piece of mind that you’re on the right track.

While a laundry list of financial must-dos was probably not what you were thinking I’d be providing you this silly season, they’re arguably the best gifts I could share with you. Setting yourself up for success in 2024 begins with some smart planning, and some strategic decision-making.

Taking control of your financial wellbeing now, especially heading into Christmas can help to alleviate stress and pave the way for a merry and bright 2024.

Victoria Devine is an award-winning retired financial adviser, best-selling author, and host of Australia’s number one finance podcast, She’s on the Money. Victoria is also the founder and co-director of Zella Money.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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