December 7, 2022 • 22 mins
Between November and December, Australians are expected to spend a whopping $66 billion according to estimates from the Australian Retailers Association, largely on food, alcohol, and toys.
This week on It All Adds Up, Jess and Dom tackle some ways you can save some money this Christmas, from taking a low-key approach to gifting to thinking outside the box when it comes to wrapping paper.
It All Adds Up is the podcast where we make money easy to understand so that listeners can begin building their financial wealth. You can submit questions via email or voice memo to italladdsup@nine.com.au for us to answer each week.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
S1 (00:05):
Hello and welcome to It All Adds Up the podcast
where we chat about money, how to get it, how
to spend it and how to invest it. I'm senior
economics writer Jess Irvine.
S2 (00:15):
And I'm money and a dumb pal. And just as
Michael Bublé once said in his 2011 Christmas album, it's
beginning to feel a lot like Christmas.
S1 (00:24):
It is. Did he sing it or did he croon it?
S2 (00:27):
He crooned it. He definitely crooned it.
S1 (00:29):
He's a bit of a creator. I love it. He's
hitting me up in the mail. My Spotify ads seem
to be Bublé related.
S2 (00:35):
On that note, this episode today does have a bit
of a Christmas Eve theme because we're going to talk
about how you can save a bit of money around
the festive season in all sort of different shapes and
sizes and forms. And just if you bought your Christmas
gifts yet, are you an early gift buyer?
S1 (00:50):
I've done a bit of it. I'd love to. I'd
love to say that I did what I gave advice
to everyone to do, which was to sort of buy
everything in the Black Friday sales. And I do have
a friend who sort of that weekend said, I'm done.
I've bought every single, single gift that I needed that
sort of half price off. And I did not do that.
I have I'm not sure about the average age of
the listeners of our podcast, but I am in close
(01:11):
contact with Santa because I have a son. And so
we're in direct liaison in terms of what goods will
be delivered from the North Pole this year and which
ones I'm directly responsible for, for getting in. There's still
some last minute requests coming in. So managing that flow,
that's where I'm at. So I've bought a few things,
(01:33):
got a few things I need to tell Santa still
to procure. But how about you?
S2 (01:38):
I'm a really terrible gift buyer. Like, I'm. I'm like,
you know, sorry to my family who does listen to
this podcast, but I'm like a real last minute, sort
of like, you know what? What do I get this year?
I feel like I've been actually a little bit better
than usual. Like, sometimes I will quite literally do things
like the last week, like you'll see me at High Point, like,
you know, roaming around trying to find gifts. But I've
(01:58):
been I've been a little bit better this year. I've
got I've got my gifts sort of planned out. I'm
feeling I'm feeling good.
S1 (02:03):
Yeah. I have actually followed what is our first piece
of advice about sort of gift giving and managing costs,
which is to talk about it with your family and friends.
So I've actually this year I have texted a couple
of my girlfriends, we've got a group chat, there's two
of us. And I said, Oh, I'll tell people. I'll
just read it out from my phone because I think
(02:23):
that's helpful. The sort of the phraseology about this was
my way of telling them, Hey, I'm not going to
spend a lot of money on you this Christmas. I
said it in a really nice way. I said, Hello, lovelies.
Heads up. I'll be buying you both a little Christmas
present this year in the modest $25 range. Santa's emoji,
Smiley face emoji.
S2 (02:41):
So that's it? That's perfect. That's exactly what you want
to do.
S1 (02:44):
Nothing says love more than a specific monetary value to me.
S2 (02:47):
Yeah, and a couple of emojis.
S1 (02:50):
And a couple of emoji. And so that was well received.
They like, Oh, thanks for letting me know. Yeah, I'll.
I'll do the same for you. So you sort of
just telegraph ahead of time because I did have some
aukey's situations last year where people have bought me presents
and I hadn't bought presents for them yet. So making
a list, figuring out who you're actually going to buy
gifts for is a great place to start, isn't it?
S2 (03:11):
Yeah, absolutely. And I think, as you mentioned, this is
sort of, you know, what we're going to talk about
in terms of some sort of ideas for you to say,
because it is it's been a hard year and it's
been a hard few years and there's a few things
going on in the world. I don't know anyone's noticed,
but there's a couple of things that are happening. And
this means that we don't have as much money as
we may have had in previous years. We won't get
into it. You know, there's a lot of a lot
(03:31):
of things, but generally that means that we're approaching Christmas
and people probably have a little less cash in their
pocket than they might usually. So I think there is
a few things that you can do to sort of
sort of mitigate that or sort of get ahead of that.
But yeah, as I was just sort of mentioned, just
talking about it, I like, you know, I'm I'm blessed
by the fact that I've only got a very small
group of people that I buy gifts for, like it's
pretty much my immediate family and that's it. So I
(03:52):
don't really have to do sort of the awkward like, oh,
is my cousin going to get me get me a
gift this year, anything like that. But I know a
lot of people do. So it is worth one of
those things that it's sort of worth, you know, getting
ahead of and chatting about now.
S1 (04:03):
Yeah. And I feel like the conversation this year is
pretty different because everyone knows we've all been smashed by
the cost of living, by interest rates going up, rents
going up. I feel like there's a different context for
this Christmas to be able to say, Hey, look, my
budget is tight. There's just actually I haven't got a
lot of room in the in the budget this year
to do extravagant gifts. But I'm really looking forward to
(04:26):
spending time with you. And I'd also love to get
you something. But you know, it's going to be that
more modest price range. But hey, what's Christmas about anyway?
It's not about gifts that are going to put me
into bankruptcy. You know, like I feel like there's room
to have a new and conversation about it and an
open and honest one. And it's better to have that conversation.
(04:46):
And I think you might be actually met by relief
if you are the one that initiates that. Yeah, because
everyone's feeling it.
S2 (04:53):
Yeah, absolutely. And also stop. So situations where someone might
get you like a really generous gift and you'd be like,
I just got them like, you know Pam from Coles or.
Something like that. I don't know. It sort of prevents
a situations where there might be a really awkward mismatch
in sort of the level of of money you've spent
on someone to have.
S1 (05:09):
A chat about it with your people that you're going
to give presents to.
S2 (05:14):
And then once you do actually get to the to
the gift giving stage, there's multiple different ways and different
forms that gifts can can bring. Like obviously we're all
fairly conditioned into, I think, you know, the standard gifts
of material objects and, you know, the various different sizes
and expenses and all that sort of stuff. But, you know,
it's broad and vast to the world of gift giving. Yes, it.
S1 (05:34):
Is. You've got to think laterally, Open your minds. And
my favorite piece of gift giving advice comes from economists. And,
you know, I listen to economists way too much. But
the best piece of advice from economists on gift giving
is to give the gift of cash.
S2 (05:52):
So I. I love getting cash. I think there's I
think it's an underrated gift.
S1 (05:56):
I know. I think we've as a society found a
really socially. Okay. Way to do that with gift cards.
You know, somehow it's different if you just hand somebody
a crisp $50 note is somehow different to giving them
a gift card that says $50. Yeah.
S2 (06:11):
Yeah.
S1 (06:12):
It's different and it's okay. And here's a gift cards
this Christmas. And, you know, if people and loved ones
are feeling a bit of the pressure, you can get
gift cards that might go for not just even for
a specific retailer, but like for a shopping center like
Westfield does gift cards. And so you're essentially giving them
(06:32):
50 bucks or whatever, but they could go spend it.
Maybe if they need to spend it on the groceries,
they can go do that at a Kohl's or Woolies
in the same shopping center. So there's no judgment as
to how they're actually going to spend the money. So
I like that because there was this fantastic American book
by an economist, Joseph Waldfogel, called Scrooge, a nomics, and
(06:53):
he talks about the dead, the dead weight loss of Christmas.
So you had 50 bucks in your pocket and you
went and spent it on 50 bucks of a 50, whatever.
You've just burned that cash into something that the gift
receiver might not value. You know, they might only have
wanted to spend 20 bucks on hand. So you've sort
of created this dead weight loss for society. So the
(07:15):
most efficient thing is to just give the $50 note
to the person to go spend how they want to
spend it. So I would love to normalize that.
S2 (07:23):
I hear this and I and I think it's valid,
but at the same time, it makes me think that
like Christmas with economists is not like the most like,
fun affair. It's just like, you know, everyone sitting around
had each other like $50 notes and being like, Now
don't spend it too quickly. Remember, inflation's going up. You know,
that's it. I mean, I understand the premise of it, but,
you know.
S1 (07:43):
Yeah. So if you're not into that, maybe let's whip
through some other options.
S2 (07:48):
Like, and I think one of the classic ones that
you see, especially for like big families, are like people
who have like really big Christmases, like the Secret Santa
sort of thing or it's like a, you know, $20 limit.
You're not getting anything too wild. And that can be
extended to like, you know, maybe you hadn't haven't done
that with your family in the past. And maybe this
year you go, Hey, maybe we should do this this year, guys,
because that means we can spend a little bit less
money than we usually do, which is always a good option.
(08:10):
And so. GROSS And this can be fun, especially if
you do the one we get to steal the present
from other people.
S1 (08:15):
How does that work?
S2 (08:16):
Like, everyone has a gift and then you can like,
instead of when you get your gift, you can choose
to keep it or you can like steal someone else's.
It gets pretty brutal. I think it's I think it's
maybe only good if it's like a really big group
of people. You wouldn't want to do that with like,
just like your four family members or something like that.
S1 (08:29):
Yeah. Okay. That's. Yeah. So instead of buying a gift
for all four people, whatever, you only have to buy
one gift. Yeah. You save the money. Yeah, I think
that would be a good thing for people to consider
this year. This is another one that maybe makes me
look a bit Scrooge, but I love the idea of have.
And I've never done this, but having setting a free challenge. So, like,
you can only give gifts that you got for free.
(08:53):
And I do have a friend who she said that
they did this like, including like stuff you find on
the curbside, you know, in hard rubbish collection, which I
love going scavenging through. You can join like street bounty
groups on Facebook and they say there's a there's a
hot looking chest of drawers on the corner or whatever.
And then you can go and find the good stuff
(09:15):
or there's like buy nothing. Groups on Facebook or Freecycle
is another one. So I just think that could be
it sort of. It also puts more onus on the
shoppers when you're not shopping, you know, spending money to
like be creative and really person and like think outside
the box. I think that could be fun if you
and then you're not spending any money.
S2 (09:36):
Yeah exactly. And there's I suppose that extends to things
like doing like a handmade gift to Christmas. So that's
usually that's very low cost. Like, yeah, you know, I've
definitely had a few gifts like that in the past,
which are always very nice, is like easily have that
sort of personable sort of special sort of aspect to
it without having spent a lot of money on it.
S1 (09:52):
I love the idea I heard of like you could
get a jar and you could get paddle pop sticks
or whatever pieces of paper and put out, you know,
12 or one. 52. If you want to do one
per week and like put a little promise on there,
like for your partner to say, I'll take out the
bins for January and that's, you know, or, or not even,
you know, put it to a month but like it
(10:13):
and you pull out a stick and you know it's
redeemable for you do it.
S2 (10:18):
As low as like one of the sixes and say
like I will give you $50 like defeats the entire
purpose of it. Monetary non-monetary gifts. Yes. In the same
sort of vein, I think there's been this big boom
over the past, like I'd say, decade. So giving people
experiences rather than gifts. So like, you know, rather than
giving someone a new phone, you give them like a
hot air balloon ride or something like that. Right. But like,
(10:39):
that can also be like experience is going to be free.
You can be like, I am going to take you
on a lovely bushwalk and we're going to go and
have a lovely bushwalk somewhere together. And that's my Christmas
gift to you. And that's that's like, you know, what
are you paying for that, Like petrol to get there
I suppose, like, you know, but like that's, that's about
it really.
S1 (10:54):
So the thing is if it's like I'm going to
buy you theatre tickets if you were going to do
that anyway, it's sort of just shifting that forward and
rebadging that as a present when it's money you were
probably going to spend to do something together anyway. So
that's kind of cheating.
S2 (11:07):
Yeah, exactly. And we love cheating. So on to some
more sort of like non directly non gif related ideas.
Obviously there's lots of things you can do when it
comes to giving gifts to your family members or your friends.
But Christmas is also just an expensive like day and
like couple of days. Like all the planning are like
lunch is expensive, food is expensive. So there are some
things you can do there. Like you could always do
(11:27):
the classic bring a plate. I've never done it, but
I always say it looks like so much fun. Just like,
you know, everyone that's coming. Just like tell them to
bring a meal. And as long as you don't all
tell them to bring the same meal, you probably have
quite a good little Christmas spread.
S1 (11:39):
Yeah, a little potluck party. You know, somebody you do
the protein, you do the salad, you do the veg,
you do dessert, you do the cheeses. I think that
can work out really well. And that sort of takes
the pressure off the host, whoever's hosting Christmas to incur
all the expense. Because like we know that grocery prices,
the one of the things that are a real pain
(12:00):
point for people, you know, various supply interruptions. So just yeah,
the food related costs of Christmas are so big. I
like that idea. And even, you know, when it comes
to managing that costs, I would say, you know, so
it doesn't just come in one big shop on Christmas
Eve trying to sort of be purchasing some of the
food and, you know, the nonperishable stuff. Look for the proteins.
(12:25):
You know, if you have all this, I don't think
you can freeze prawns or can you? But, you.
S2 (12:29):
Know, you can freeze prawns.
S1 (12:31):
You know, it's like buying some of that protein, you know,
in advance. You know, if you can find some specials
and then freeze it. So just getting ready for the
day so that it's not all going to be this
$500 shop that you do on Christmas Eve because you
got people coming round, getting ahead of it and being
aware of it. I guess either way we're going to eat.
(12:52):
And I think with Christmas this year, like we all
due a little bit of celebration. So we advice that
we're giving, you know, do have a nice Christmas this year, everyone,
because you've earned it.
S2 (13:04):
Absolutely.
S1 (13:05):
I know. But but I also love the vibe in
the spirit of just keeping the costs low and remembering
what it's all about, which is spending time with people
and having some nice food. But you don't have to
have the fanciest of everything.
S2 (13:18):
Yeah, and especially if you like, you feel like a
loyalty points order. You know, your everyday rewards, your flybuys.
This is a great time to sort of cash. I mean,
I realized that I had 20 bucks sitting on my
flybuys I had no idea how I'd entered or when
to get used. It was fantastic. You know, these sort
of things, they just they just accumulate so good time
to cash in that sort of stuff and also do
things like cashback websites are really great and you know,
(13:40):
you're a fan of those. Yes.
S1 (13:42):
Yeah, I am. And this applies to gift giving as well.
You know, you go into sites or apps like Cash
Rewards or Shopback and you check the retailer, but you're
going to you're about to go to and see if
there's like a 20% cashback. And then, you know, you're
essentially reducing the cost of what you're about to buy
and getting access to some discounts that might not be
(14:02):
available in-store. So, yeah, you know, that is all that
all adds up to them as as we know.
S2 (14:09):
Oh, it does all add up. And my, my last
little tip of this was just something that I really
enjoy doing is reusing like the wrapping paper that you've
gotten from like previous gifts. My family's big on this.
S1 (14:21):
I think we've got a vibe going on here. It's
a vibe of just thinking laterally, recycling where you can
keeping the costs down and sort of making it a cheerful,
a cheap but cheerful Christmas for 2022, I think is
in order.
S2 (14:34):
Yeah. And then in terms of like, like I post
Christmas stuff, I think, you know, thinking about the amount
of money you spend on Christmas doesn't necessarily stop at Christmas.
Like obviously extends to something like Boxing Day because it's
like a, you know, a time honored Aussie tradition to
go absolutely hog wild at Boxing Day sales and just
go and, you know, go into Myer and buy half
the store, which you like obviously is a lot of fun.
But I think it's like you can also just like
(14:55):
not do that and just chill out a bit, right?
S1 (14:58):
Like interesting this year to see because there's always that
footage that they run along with people who've camped out
and those that run through the doors. I wonder if
that will happen this year because like the expectations is
that people will be spending big for Christmas, but we're
all aware that we're heading into 2023 with higher mortgages
and cost of living. BE I wonder how crazy will
(15:20):
go in the sales. The advice would be don't.
S2 (15:23):
Say anything else just on your on your list, considering
your you're the great budgeting guru.
S1 (15:27):
Yes. The 100% is. I would just urge people where
we've only just started December. If you haven't done all
your spending just yet, it would be so powerful for
you to keep a list like Santa of all the
stuff that you're buying. So we've discussed, you know, Christmas spending.
It's it's the food, it's the travel, it's the wrapping paper,
(15:48):
it's the cards, it's the decorations. Like the amount of
money we can spend at this time of the year
is quite astounding. If you keep a list of everything
that you spend, you can then tally it up and go, Well,
my family Christmas costs, like, say, if it's 1200 dollars,
I know that now and then maybe next year I
can set aside. That would be a. Hundred dollars per month,
(16:10):
and that will smooth out, you know, you can essentially
save for Christmas in advance without having to do one
of those, you know, online, you know, save up for
a hamper things. You know, you you look after future
you and say, I know Christmas comes every year and
it's always a bit financially tight for me. And I
also think that keeping a track of your spending can
(16:30):
help you to keep a lid on the spending as well.
If you realize, oh, hey, wait a minute, we're up
to $800 that I've spent to you know, if you're
managing a big your family, you know, just that process
of being mindful of what we are spending at this
time of year because, you know, we all want to
have a YOLO kind of Christmas. And, you know, but,
you know, we've got those budgetary pressures that we're coming
up to. So what? This is what I do. I
(16:51):
have like a little worksheet where I, you know, I
figure out Christmas presents for who wrapping whatever the costs
are going to be. And I split it up and
I save for it throughout the year. And I make
sure that I don't invest that money or put it
somewhere else. It's waiting there for me to go. And
that has really helped to reduce the stress around Christmas spending,
which is one of those big lumpy sort of spending periods.
So tracking spending people and yeah, hopefully even if you
(17:13):
are feeling the stress this year, you can come up
with a bit more of an action plan for 2023.
S2 (17:19):
So our listener question this week comes from David, who's
following on from last week's episode that we did on
private health insurance and something that we didn't get time
to mention in that episode was lifetime health cover loading.
Just do you want to talk through about what that
is and why people need to know about it?
S1 (17:33):
Yeah. This is actually a really important one and I'm
glad that we get a chance to raise it. Now,
if you're looking at whether to take up private health insurance,
something that is really relevant for people at about the
age of 30 is to consider whether they that is
the point where you want to take out the cover,
because if you don't for every year after your 30,
there is a lifetime health cover loading that starts to
(17:56):
apply to your premiums. If you subsequently then do take
out private health insurance. And that kicks in at a
rate of 2% loading on top of your premium for
every year aged over 30. So by the time you're 40,
if you were to take out private health insurance and
had not had it previously, you could be paying an
extra 20% per year of the cost of your premiums.
(18:18):
And that would apply to you for a ten year period.
So it can really hit people who don't have the
cover from age 30. And it's designed to encourage people
to get the cover from the age of 30 and
to keep it. But yeah, you can really be hit
with some higher premium costs if you don't have it.
I would just say that for people who, you know,
it's it's there to scare you into getting private health
(18:40):
insurance if you're below the Medicare levy thresholds where you're
not going to be slugged extra tax for not having
private health insurance. And if you're never going to want
private health insurance, don't be scared by this into taking
it out, because then you'll be paying for premiums that
you don't want and you don't need. And so it
is a calculation for everyone to sort of think about.
And some people may not want to take out private
(19:02):
health insurance until they're 60. So you could have 30
years of paying no health insurance premiums. Yes. When you're 60,
you'd be slugged with a much higher you know, your
premiums might not be $1,000 a year. They could be
closer to $2,000. But you can do the sums. For
some people, you may still be better off by just
not having the cover when you didn't need it and
(19:23):
then wearing the higher lifetime health cover loading for the
ten years until it drops off. It is something for
people to be aware of and have a little Google
about whether that would apply to you. If you're someone
who you don't have cover now, you're getting to your
late twenties, early thirties. Maybe it might be worth looking
at whether you do want to get the cover just
a couple of years earlier to avoid paying that. And
(19:46):
just finally, I want to give you a budget tip
of the week, as I always do. I came across
this really interesting finding, a US survey of people about
their subscriptions, and people were asked like, how much do
you think you spend each month on subscriptions? And the
average response was like way under what they actually spent.
They sort of estimated, I think I spent about $86.
(20:08):
That would be US dollars. But actually, when they got
people to go through and fess up and look at
this site, this is how much they actually spend. It
was more like $219. So basically, people have absolutely no
clue how many subscriptions they've got. And 42% of people
have found subscriptions that they just had forgotten that they
were doing. So subscription costs. My number one tip is
(20:31):
to cancel your subscriptions as soon as you get them.
So some of them this doesn't work because they then
cancel the product. But most of them you say, okay, well,
I'm signing up. Okay, you're forcing me to give you
the credit card details. But after this month, I really
I'm not sure I'm going to want it. You just
sign up and cancel straightaway. And that's a little love
letter to future you to say this is going to
(20:53):
cut out after a month. And if you still want it,
you can sign back up again. But otherwise, he's a
subscription that I'm not just going to forget about and
have on going for the rest of my life. So
just cancel straight away.
S2 (21:05):
I got a little sub tip for this is getting
a bank account or a banking app that notifies you
when money goes in or out of your account. I
just I feel like this should be standard. I know
a lot of banks don't do it, but like the
bank that I'm with, you know, any time I get
debited for anything, I get a notification on my phone
that says, you know, $17 has been taken out of
your account for full membership or whatever like that. And
(21:27):
it's great because you never have any surprise subscription costs
because you see everything that's happening. And if something pops
up that goes like and you get a notification, be like,
you know, 20 bucks is taken out of this. Be like, oh,
you know, I'm still subscribed to that. And you go
and cancel it. So there's no there's no surprises when
you open up your bank account because everything's you're being
notified about everything.
S1 (21:43):
That's great. I usually hate notifications on those things, like
you got an Instagram message, whatever. I have them turned off.
But yeah, you should know if money's coming out of
your account.
S2 (21:51):
Absolutely.
S1 (21:52):
Merry Christmas, everyone. I guess just to wrap that up,
keep it cheap and cheerful this year would be our
overall advice. You know, look. Look for some lateral ways
to have fun this Christmas. Thanks, Jim, as always. Merry
Christmas to you.
S2 (22:06):
Merry Christmas. And I'll see you next week.
S1 (22:07):
See you next week.
S2 (22:14):
This episode of It All Adds Up was produced by
Chai Wang. The information discussed is general in nature and
does not take into account your personal financial situation, goals
or objectives. You should always do your own research or
get professional advice before making any major financial decisions. If
you like today's episode, hit follow a new podcast app.
Leave a review and recommend it to all your friends.
(22:35):
You can also submit your listener questions in text or
audio form at. It all adds up at 9:00 PM today.
Thanks for listening.
Hello and welcome to It All Adds Up the podcast
where we chat about money, how to get it, how
to spend it and how to invest it. I'm senior
economics writer Jess Irvine.
S2 (00:15):
And I'm money and a dumb pal. And just as
Michael Bublé once said in his 2011 Christmas album, it's
beginning to feel a lot like Christmas.
S1 (00:24):
It is. Did he sing it or did he croon it?
S2 (00:27):
He crooned it. He definitely crooned it.
S1 (00:29):
He's a bit of a creator. I love it. He's
hitting me up in the mail. My Spotify ads seem
to be Bublé related.
S2 (00:35):
On that note, this episode today does have a bit
of a Christmas Eve theme because we're going to talk
about how you can save a bit of money around
the festive season in all sort of different shapes and
sizes and forms. And just if you bought your Christmas
gifts yet, are you an early gift buyer?
S1 (00:50):
I've done a bit of it. I'd love to. I'd
love to say that I did what I gave advice
to everyone to do, which was to sort of buy
everything in the Black Friday sales. And I do have
a friend who sort of that weekend said, I'm done.
I've bought every single, single gift that I needed that
sort of half price off. And I did not do that.
I have I'm not sure about the average age of
the listeners of our podcast, but I am in close
(01:11):
contact with Santa because I have a son. And so
we're in direct liaison in terms of what goods will
be delivered from the North Pole this year and which
ones I'm directly responsible for, for getting in. There's still
some last minute requests coming in. So managing that flow,
that's where I'm at. So I've bought a few things,
(01:33):
got a few things I need to tell Santa still
to procure. But how about you?
S2 (01:38):
I'm a really terrible gift buyer. Like, I'm. I'm like,
you know, sorry to my family who does listen to
this podcast, but I'm like a real last minute, sort
of like, you know what? What do I get this year?
I feel like I've been actually a little bit better
than usual. Like, sometimes I will quite literally do things
like the last week, like you'll see me at High Point, like,
you know, roaming around trying to find gifts. But I've
(01:58):
been I've been a little bit better this year. I've
got I've got my gifts sort of planned out. I'm
feeling I'm feeling good.
S1 (02:03):
Yeah. I have actually followed what is our first piece
of advice about sort of gift giving and managing costs,
which is to talk about it with your family and friends.
So I've actually this year I have texted a couple
of my girlfriends, we've got a group chat, there's two
of us. And I said, Oh, I'll tell people. I'll
just read it out from my phone because I think
(02:23):
that's helpful. The sort of the phraseology about this was
my way of telling them, Hey, I'm not going to
spend a lot of money on you this Christmas. I
said it in a really nice way. I said, Hello, lovelies.
Heads up. I'll be buying you both a little Christmas
present this year in the modest $25 range. Santa's emoji,
Smiley face emoji.
S2 (02:41):
So that's it? That's perfect. That's exactly what you want
to do.
S1 (02:44):
Nothing says love more than a specific monetary value to me.
S2 (02:47):
Yeah, and a couple of emojis.
S1 (02:50):
And a couple of emoji. And so that was well received.
They like, Oh, thanks for letting me know. Yeah, I'll.
I'll do the same for you. So you sort of
just telegraph ahead of time because I did have some
aukey's situations last year where people have bought me presents
and I hadn't bought presents for them yet. So making
a list, figuring out who you're actually going to buy
gifts for is a great place to start, isn't it?
S2 (03:11):
Yeah, absolutely. And I think, as you mentioned, this is
sort of, you know, what we're going to talk about
in terms of some sort of ideas for you to say,
because it is it's been a hard year and it's
been a hard few years and there's a few things
going on in the world. I don't know anyone's noticed,
but there's a couple of things that are happening. And
this means that we don't have as much money as
we may have had in previous years. We won't get
into it. You know, there's a lot of a lot
(03:31):
of things, but generally that means that we're approaching Christmas
and people probably have a little less cash in their
pocket than they might usually. So I think there is
a few things that you can do to sort of
sort of mitigate that or sort of get ahead of that.
But yeah, as I was just sort of mentioned, just
talking about it, I like, you know, I'm I'm blessed
by the fact that I've only got a very small
group of people that I buy gifts for, like it's
pretty much my immediate family and that's it. So I
(03:52):
don't really have to do sort of the awkward like, oh,
is my cousin going to get me get me a
gift this year, anything like that. But I know a
lot of people do. So it is worth one of
those things that it's sort of worth, you know, getting
ahead of and chatting about now.
S1 (04:03):
Yeah. And I feel like the conversation this year is
pretty different because everyone knows we've all been smashed by
the cost of living, by interest rates going up, rents
going up. I feel like there's a different context for
this Christmas to be able to say, Hey, look, my
budget is tight. There's just actually I haven't got a
lot of room in the in the budget this year
to do extravagant gifts. But I'm really looking forward to
(04:26):
spending time with you. And I'd also love to get
you something. But you know, it's going to be that
more modest price range. But hey, what's Christmas about anyway?
It's not about gifts that are going to put me
into bankruptcy. You know, like I feel like there's room
to have a new and conversation about it and an
open and honest one. And it's better to have that conversation.
(04:46):
And I think you might be actually met by relief
if you are the one that initiates that. Yeah, because
everyone's feeling it.
S2 (04:53):
Yeah, absolutely. And also stop. So situations where someone might
get you like a really generous gift and you'd be like,
I just got them like, you know Pam from Coles or.
Something like that. I don't know. It sort of prevents
a situations where there might be a really awkward mismatch
in sort of the level of of money you've spent
on someone to have.
S1 (05:09):
A chat about it with your people that you're going
to give presents to.
S2 (05:14):
And then once you do actually get to the to
the gift giving stage, there's multiple different ways and different
forms that gifts can can bring. Like obviously we're all
fairly conditioned into, I think, you know, the standard gifts
of material objects and, you know, the various different sizes
and expenses and all that sort of stuff. But, you know,
it's broad and vast to the world of gift giving. Yes, it.
S1 (05:34):
Is. You've got to think laterally, Open your minds. And
my favorite piece of gift giving advice comes from economists. And,
you know, I listen to economists way too much. But
the best piece of advice from economists on gift giving
is to give the gift of cash.
S2 (05:52):
So I. I love getting cash. I think there's I
think it's an underrated gift.
S1 (05:56):
I know. I think we've as a society found a
really socially. Okay. Way to do that with gift cards.
You know, somehow it's different if you just hand somebody
a crisp $50 note is somehow different to giving them
a gift card that says $50. Yeah.
S2 (06:11):
Yeah.
S1 (06:12):
It's different and it's okay. And here's a gift cards
this Christmas. And, you know, if people and loved ones
are feeling a bit of the pressure, you can get
gift cards that might go for not just even for
a specific retailer, but like for a shopping center like
Westfield does gift cards. And so you're essentially giving them
(06:32):
50 bucks or whatever, but they could go spend it.
Maybe if they need to spend it on the groceries,
they can go do that at a Kohl's or Woolies
in the same shopping center. So there's no judgment as
to how they're actually going to spend the money. So
I like that because there was this fantastic American book
by an economist, Joseph Waldfogel, called Scrooge, a nomics, and
(06:53):
he talks about the dead, the dead weight loss of Christmas.
So you had 50 bucks in your pocket and you
went and spent it on 50 bucks of a 50, whatever.
You've just burned that cash into something that the gift
receiver might not value. You know, they might only have
wanted to spend 20 bucks on hand. So you've sort
of created this dead weight loss for society. So the
(07:15):
most efficient thing is to just give the $50 note
to the person to go spend how they want to
spend it. So I would love to normalize that.
S2 (07:23):
I hear this and I and I think it's valid,
but at the same time, it makes me think that
like Christmas with economists is not like the most like,
fun affair. It's just like, you know, everyone sitting around
had each other like $50 notes and being like, Now
don't spend it too quickly. Remember, inflation's going up. You know,
that's it. I mean, I understand the premise of it, but,
you know.
S1 (07:43):
Yeah. So if you're not into that, maybe let's whip
through some other options.
S2 (07:48):
Like, and I think one of the classic ones that
you see, especially for like big families, are like people
who have like really big Christmases, like the Secret Santa
sort of thing or it's like a, you know, $20 limit.
You're not getting anything too wild. And that can be
extended to like, you know, maybe you hadn't haven't done
that with your family in the past. And maybe this
year you go, Hey, maybe we should do this this year, guys,
because that means we can spend a little bit less
money than we usually do, which is always a good option.
(08:10):
And so. GROSS And this can be fun, especially if
you do the one we get to steal the present
from other people.
S1 (08:15):
How does that work?
S2 (08:16):
Like, everyone has a gift and then you can like,
instead of when you get your gift, you can choose
to keep it or you can like steal someone else's.
It gets pretty brutal. I think it's I think it's
maybe only good if it's like a really big group
of people. You wouldn't want to do that with like,
just like your four family members or something like that.
S1 (08:29):
Yeah. Okay. That's. Yeah. So instead of buying a gift
for all four people, whatever, you only have to buy
one gift. Yeah. You save the money. Yeah, I think
that would be a good thing for people to consider
this year. This is another one that maybe makes me
look a bit Scrooge, but I love the idea of have.
And I've never done this, but having setting a free challenge. So, like,
you can only give gifts that you got for free.
(08:53):
And I do have a friend who she said that
they did this like, including like stuff you find on
the curbside, you know, in hard rubbish collection, which I
love going scavenging through. You can join like street bounty
groups on Facebook and they say there's a there's a
hot looking chest of drawers on the corner or whatever.
And then you can go and find the good stuff
(09:15):
or there's like buy nothing. Groups on Facebook or Freecycle
is another one. So I just think that could be
it sort of. It also puts more onus on the
shoppers when you're not shopping, you know, spending money to
like be creative and really person and like think outside
the box. I think that could be fun if you
and then you're not spending any money.
S2 (09:36):
Yeah exactly. And there's I suppose that extends to things
like doing like a handmade gift to Christmas. So that's
usually that's very low cost. Like, yeah, you know, I've
definitely had a few gifts like that in the past,
which are always very nice, is like easily have that
sort of personable sort of special sort of aspect to
it without having spent a lot of money on it.
S1 (09:52):
I love the idea I heard of like you could
get a jar and you could get paddle pop sticks
or whatever pieces of paper and put out, you know,
12 or one. 52. If you want to do one
per week and like put a little promise on there,
like for your partner to say, I'll take out the
bins for January and that's, you know, or, or not even,
you know, put it to a month but like it
(10:13):
and you pull out a stick and you know it's
redeemable for you do it.
S2 (10:18):
As low as like one of the sixes and say
like I will give you $50 like defeats the entire
purpose of it. Monetary non-monetary gifts. Yes. In the same
sort of vein, I think there's been this big boom
over the past, like I'd say, decade. So giving people
experiences rather than gifts. So like, you know, rather than
giving someone a new phone, you give them like a
hot air balloon ride or something like that. Right. But like,
(10:39):
that can also be like experience is going to be free.
You can be like, I am going to take you
on a lovely bushwalk and we're going to go and
have a lovely bushwalk somewhere together. And that's my Christmas
gift to you. And that's that's like, you know, what
are you paying for that, Like petrol to get there
I suppose, like, you know, but like that's, that's about
it really.
S1 (10:54):
So the thing is if it's like I'm going to
buy you theatre tickets if you were going to do
that anyway, it's sort of just shifting that forward and
rebadging that as a present when it's money you were
probably going to spend to do something together anyway. So
that's kind of cheating.
S2 (11:07):
Yeah, exactly. And we love cheating. So on to some
more sort of like non directly non gif related ideas.
Obviously there's lots of things you can do when it
comes to giving gifts to your family members or your friends.
But Christmas is also just an expensive like day and
like couple of days. Like all the planning are like
lunch is expensive, food is expensive. So there are some
things you can do there. Like you could always do
(11:27):
the classic bring a plate. I've never done it, but
I always say it looks like so much fun. Just like,
you know, everyone that's coming. Just like tell them to
bring a meal. And as long as you don't all
tell them to bring the same meal, you probably have
quite a good little Christmas spread.
S1 (11:39):
Yeah, a little potluck party. You know, somebody you do
the protein, you do the salad, you do the veg,
you do dessert, you do the cheeses. I think that
can work out really well. And that sort of takes
the pressure off the host, whoever's hosting Christmas to incur
all the expense. Because like we know that grocery prices,
the one of the things that are a real pain
(12:00):
point for people, you know, various supply interruptions. So just yeah,
the food related costs of Christmas are so big. I
like that idea. And even, you know, when it comes
to managing that costs, I would say, you know, so
it doesn't just come in one big shop on Christmas
Eve trying to sort of be purchasing some of the
food and, you know, the nonperishable stuff. Look for the proteins.
(12:25):
You know, if you have all this, I don't think
you can freeze prawns or can you? But, you.
S2 (12:29):
Know, you can freeze prawns.
S1 (12:31):
You know, it's like buying some of that protein, you know,
in advance. You know, if you can find some specials
and then freeze it. So just getting ready for the
day so that it's not all going to be this
$500 shop that you do on Christmas Eve because you
got people coming round, getting ahead of it and being
aware of it. I guess either way we're going to eat.
(12:52):
And I think with Christmas this year, like we all
due a little bit of celebration. So we advice that
we're giving, you know, do have a nice Christmas this year, everyone,
because you've earned it.
S2 (13:04):
Absolutely.
S1 (13:05):
I know. But but I also love the vibe in
the spirit of just keeping the costs low and remembering
what it's all about, which is spending time with people
and having some nice food. But you don't have to
have the fanciest of everything.
S2 (13:18):
Yeah, and especially if you like, you feel like a
loyalty points order. You know, your everyday rewards, your flybuys.
This is a great time to sort of cash. I mean,
I realized that I had 20 bucks sitting on my
flybuys I had no idea how I'd entered or when
to get used. It was fantastic. You know, these sort
of things, they just they just accumulate so good time
to cash in that sort of stuff and also do
things like cashback websites are really great and you know,
(13:40):
you're a fan of those. Yes.
S1 (13:42):
Yeah, I am. And this applies to gift giving as well.
You know, you go into sites or apps like Cash
Rewards or Shopback and you check the retailer, but you're
going to you're about to go to and see if
there's like a 20% cashback. And then, you know, you're
essentially reducing the cost of what you're about to buy
and getting access to some discounts that might not be
(14:02):
available in-store. So, yeah, you know, that is all that
all adds up to them as as we know.
S2 (14:09):
Oh, it does all add up. And my, my last
little tip of this was just something that I really
enjoy doing is reusing like the wrapping paper that you've
gotten from like previous gifts. My family's big on this.
S1 (14:21):
I think we've got a vibe going on here. It's
a vibe of just thinking laterally, recycling where you can
keeping the costs down and sort of making it a cheerful,
a cheap but cheerful Christmas for 2022, I think is
in order.
S2 (14:34):
Yeah. And then in terms of like, like I post
Christmas stuff, I think, you know, thinking about the amount
of money you spend on Christmas doesn't necessarily stop at Christmas.
Like obviously extends to something like Boxing Day because it's
like a, you know, a time honored Aussie tradition to
go absolutely hog wild at Boxing Day sales and just
go and, you know, go into Myer and buy half
the store, which you like obviously is a lot of fun.
But I think it's like you can also just like
(14:55):
not do that and just chill out a bit, right?
S1 (14:58):
Like interesting this year to see because there's always that
footage that they run along with people who've camped out
and those that run through the doors. I wonder if
that will happen this year because like the expectations is
that people will be spending big for Christmas, but we're
all aware that we're heading into 2023 with higher mortgages
and cost of living. BE I wonder how crazy will
(15:20):
go in the sales. The advice would be don't.
S2 (15:23):
Say anything else just on your on your list, considering
your you're the great budgeting guru.
S1 (15:27):
Yes. The 100% is. I would just urge people where
we've only just started December. If you haven't done all
your spending just yet, it would be so powerful for
you to keep a list like Santa of all the
stuff that you're buying. So we've discussed, you know, Christmas spending.
It's it's the food, it's the travel, it's the wrapping paper,
(15:48):
it's the cards, it's the decorations. Like the amount of
money we can spend at this time of the year
is quite astounding. If you keep a list of everything
that you spend, you can then tally it up and go, Well,
my family Christmas costs, like, say, if it's 1200 dollars,
I know that now and then maybe next year I
can set aside. That would be a. Hundred dollars per month,
(16:10):
and that will smooth out, you know, you can essentially
save for Christmas in advance without having to do one
of those, you know, online, you know, save up for
a hamper things. You know, you you look after future
you and say, I know Christmas comes every year and
it's always a bit financially tight for me. And I
also think that keeping a track of your spending can
(16:30):
help you to keep a lid on the spending as well.
If you realize, oh, hey, wait a minute, we're up
to $800 that I've spent to you know, if you're
managing a big your family, you know, just that process
of being mindful of what we are spending at this
time of year because, you know, we all want to
have a YOLO kind of Christmas. And, you know, but,
you know, we've got those budgetary pressures that we're coming
up to. So what? This is what I do. I
(16:51):
have like a little worksheet where I, you know, I
figure out Christmas presents for who wrapping whatever the costs
are going to be. And I split it up and
I save for it throughout the year. And I make
sure that I don't invest that money or put it
somewhere else. It's waiting there for me to go. And
that has really helped to reduce the stress around Christmas spending,
which is one of those big lumpy sort of spending periods.
So tracking spending people and yeah, hopefully even if you
(17:13):
are feeling the stress this year, you can come up
with a bit more of an action plan for 2023.
S2 (17:19):
So our listener question this week comes from David, who's
following on from last week's episode that we did on
private health insurance and something that we didn't get time
to mention in that episode was lifetime health cover loading.
Just do you want to talk through about what that
is and why people need to know about it?
S1 (17:33):
Yeah. This is actually a really important one and I'm
glad that we get a chance to raise it. Now,
if you're looking at whether to take up private health insurance,
something that is really relevant for people at about the
age of 30 is to consider whether they that is
the point where you want to take out the cover,
because if you don't for every year after your 30,
there is a lifetime health cover loading that starts to
(17:56):
apply to your premiums. If you subsequently then do take
out private health insurance. And that kicks in at a
rate of 2% loading on top of your premium for
every year aged over 30. So by the time you're 40,
if you were to take out private health insurance and
had not had it previously, you could be paying an
extra 20% per year of the cost of your premiums.
(18:18):
And that would apply to you for a ten year period.
So it can really hit people who don't have the
cover from age 30. And it's designed to encourage people
to get the cover from the age of 30 and
to keep it. But yeah, you can really be hit
with some higher premium costs if you don't have it.
I would just say that for people who, you know,
it's it's there to scare you into getting private health
(18:40):
insurance if you're below the Medicare levy thresholds where you're
not going to be slugged extra tax for not having
private health insurance. And if you're never going to want
private health insurance, don't be scared by this into taking
it out, because then you'll be paying for premiums that
you don't want and you don't need. And so it
is a calculation for everyone to sort of think about.
And some people may not want to take out private
(19:02):
health insurance until they're 60. So you could have 30
years of paying no health insurance premiums. Yes. When you're 60,
you'd be slugged with a much higher you know, your
premiums might not be $1,000 a year. They could be
closer to $2,000. But you can do the sums. For
some people, you may still be better off by just
not having the cover when you didn't need it and
(19:23):
then wearing the higher lifetime health cover loading for the
ten years until it drops off. It is something for
people to be aware of and have a little Google
about whether that would apply to you. If you're someone
who you don't have cover now, you're getting to your
late twenties, early thirties. Maybe it might be worth looking
at whether you do want to get the cover just
a couple of years earlier to avoid paying that. And
(19:46):
just finally, I want to give you a budget tip
of the week, as I always do. I came across
this really interesting finding, a US survey of people about
their subscriptions, and people were asked like, how much do
you think you spend each month on subscriptions? And the
average response was like way under what they actually spent.
They sort of estimated, I think I spent about $86.
(20:08):
That would be US dollars. But actually, when they got
people to go through and fess up and look at
this site, this is how much they actually spend. It
was more like $219. So basically, people have absolutely no
clue how many subscriptions they've got. And 42% of people
have found subscriptions that they just had forgotten that they
were doing. So subscription costs. My number one tip is
(20:31):
to cancel your subscriptions as soon as you get them.
So some of them this doesn't work because they then
cancel the product. But most of them you say, okay, well,
I'm signing up. Okay, you're forcing me to give you
the credit card details. But after this month, I really
I'm not sure I'm going to want it. You just
sign up and cancel straightaway. And that's a little love
letter to future you to say this is going to
(20:53):
cut out after a month. And if you still want it,
you can sign back up again. But otherwise, he's a
subscription that I'm not just going to forget about and
have on going for the rest of my life. So
just cancel straight away.
S2 (21:05):
I got a little sub tip for this is getting
a bank account or a banking app that notifies you
when money goes in or out of your account. I
just I feel like this should be standard. I know
a lot of banks don't do it, but like the
bank that I'm with, you know, any time I get
debited for anything, I get a notification on my phone
that says, you know, $17 has been taken out of
your account for full membership or whatever like that. And
(21:27):
it's great because you never have any surprise subscription costs
because you see everything that's happening. And if something pops
up that goes like and you get a notification, be like,
you know, 20 bucks is taken out of this. Be like, oh,
you know, I'm still subscribed to that. And you go
and cancel it. So there's no there's no surprises when
you open up your bank account because everything's you're being
notified about everything.
S1 (21:43):
That's great. I usually hate notifications on those things, like
you got an Instagram message, whatever. I have them turned off.
But yeah, you should know if money's coming out of
your account.
S2 (21:51):
Absolutely.
S1 (21:52):
Merry Christmas, everyone. I guess just to wrap that up,
keep it cheap and cheerful this year would be our
overall advice. You know, look. Look for some lateral ways
to have fun this Christmas. Thanks, Jim, as always. Merry
Christmas to you.
S2 (22:06):
Merry Christmas. And I'll see you next week.
S1 (22:07):
See you next week.
S2 (22:14):
This episode of It All Adds Up was produced by
Chai Wang. The information discussed is general in nature and
does not take into account your personal financial situation, goals
or objectives. You should always do your own research or
get professional advice before making any major financial decisions. If
you like today's episode, hit follow a new podcast app.
Leave a review and recommend it to all your friends.
(22:35):
You can also submit your listener questions in text or
audio form at. It all adds up at 9:00 PM today.
Thanks for listening.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com