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Cash-strapped at Christmas? How to navigate awkward conversations

18 November 2022 | Rachel Smith

If you’re struggling to make ends meet right now, you might not have a lot to spend on Christmas gifts. Here’s how to manage any awkward money conversations

It’s no secret that all Aussie households are feeling the pinch this Christmas. And while there’s nothing wrong with a more frugal festive season, you may still be dreading those tricky ‘So, what are we spending on gifts this year’ conversations. Eeek!


However, Jessica Irvine, finance journalist and author of Money With Jess: Your Ultimate Guide to Household Budgeting, says we shouldn’t overthink it.


“We’re all in the same boat and the cost of living crisis is affecting all household budgets – whether it’s from rising energy bills to food prices,” she says. “There’s absolutely no shame in acknowledging this. And when starting a conversation about trimming costs, you may find you’re met with relief from friends and family who are also feeling the pressure!”

How to start the money conversations

There are few things more awkward than receiving a gift when you have nothing to offer in return – so how can you tell loved ones that you want to dial down the spending? Especially if your family is the kind to go completely overboard during the silly season?


“A great way to start this is to express how you’re genuinely looking forward to spending quality time with that person,” says Jess. “Then you can simply state that your budget is looking tight this year, given the cost of living pressures, and you’d prefer to skip gifts altogether this year or try something different, like setting a maximum dollar amount.”

You could always suggest one of these ideas:

  • An adult Secret Santa where each adult gives and receives just one gift, up to an agreed dollar amount
  • A second-hand Santa challenge, where you challenge your friend or family group to only buy presents from second-hand stores, op shops or Facebook Marketplace
  • A ‘No Spend’ Christmas, where gifts exchanged must be obtained for free.

How to manage your kids’ expectations

This can be challenging, especially if you have children who are used to quite a few presents under the tree – but Jess has you covered.


“Depending on the age of your kids, you could say something like, ‘I have it on good authority that Santa’s North Pole operations have also been affected by COVID-related supply shortages this year. Some of the elves have been off sick and production lines are stretched, particularly for high-end goods like tablet devices and gaming consoles. So it may not be a year when Santa can bring lots of presents’,” she says. “Parents can modify the script as needed to suit their family circumstances!”

Handling gifting if you’re, er, cashed up

Yep, financial situations differ wildly – and you might find yourself in a position where you can easily afford to give nice gifts, but those around you can’t. What to do?


“It’s always best to assume that people’s money situations are tighter than they’ll let on,” says Jess. “If you do want to give a gift, a lovely strategy might be a gift card to certain stores or shopping centres which recipients can use to buy anything they need or want.”


She adds to make it clear that you don’t expect anything in return, and express how much you can’t wait to spend time with them as that’s what Christmas really means to you.”

Other ways to save at Christmas

Don’t be the type who leaves Christmas shopping to the 11th hour (like, on Christmas Eve). You’ll battle manic crowds, be stressed and spend far more than you need to, warns Jess.


“Instead, plan your spending early, taking advantage of Black Friday or Cyber Monday sales,” she explains. “And with a bit of time and effort it’s possible to plan thoughtful but affordable handmade gifts and experience-based gifts, too.”


When it comes to food preparations, Jess suggests spreading out your costs and building a stockpile of non-perishables over the weeks and months leading into the festive period. “Start filling the freezer and pantry now, to avoid that Christmas grocery bill shock.”


And forget expensive baubles and tinsel – get the kids involved instead. “They can make Christmas decorations from cheap craft supplies; a really fun activity that can also produce some beautiful and sentimental pieces to keep throughout the years.”

Avoid a New Year spending hangover

You know the drill: along with the actual hangover, you’re left with regret over maxed-out credit cards, cheap presents the kids stopped playing with days ago, and sorely depleted bank accounts. But avoiding all this is possible – and you can start in January, says Jess.


“You may have missed the boat this year, but if you want to make Christmas 2023 a much less stressful affair, you can smooth out the cost of big lumpy expenses, such as Christmas spending, over the entire year,” she explains. “The best way is to start saving and planning for Christmas expenses as soon as you can. Estimate your likely costs, and set aside a little each month of 2023. You can grab free budgeting worksheets at my website or Instagram.”

To wrap up…

Ultimately, it’s not about gifts, but about embracing the true spirit of Christmas – relaxing in the sun, eating nice food and catching up with friends and family members you may not have seen in a while.


“Often it’s the little things people remember the most, like a hug, a good listening ear or a thoughtful compliment,” says Jess. “Nobody who loves you wants you going into debt or jeopardising your financial future this festive season.”

Things you should know

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.