Financial experts are urging consumers to plan ahead and stick to their gift and entertainment budgets for the holiday season, rather than face a new year regretting overspending.
Plans for frugal festivities
In these lean economic times, financial experts are urging consumers to plan ahead and stick to their gift and entertainment budgets for the holiday season, rather than face a new year regretting they overspent on their credit cards, Jane Williams reports
When it comes to Christmas shopping, Daisy Dy-Liacco is always prepared.
In fact, rather than run off to the malls at the last minute, Ms Dy-Liacco, a Filipina art teacher who has lived in the UAE for 12 years, says she starts hunting for gifts as early as September.
"My family and I try to go home for Christmas every year," she says.
"We have a big party back in the Philippines and there is a tradition of buying presents for everyone. That's about 40 presents."
With so many people on her list, Ms Dy-Liacco is motivated by big sales and discounts. But for all her meticulous planning, she often neglects one crucial step - sticking to a budget.
"If you go out for one big shop, that's when you can spend up big on your credit card," she adds.
Ms Dy-Liacco estimates that she spends about Dh4,000 on gifts, which represents a considerable dent in her finances.
Despite the lean economic times, many expatriates such as Ms Dy-Liacco will inevitably push their budgets to give their families the best Christmas possible. Indeed, there's no getting away from the fact that giving and receiving is an intrinsic part of the festive season.
For many, the holiday season means overspending, rising debt and stress from buying gifts, Christmas trees and decorations we can't necessarily afford. As January draws to a close and those credit-card bills start to roll in, more than one household will be wishing they had been less extravagant.
Financial advisers urge people to be frugal and start planning early.
"In terms of financial planning, Christmas spending is something that every person needs to be aware of," says Rupert Connor, a senior financial consultant at Acuma Wealth Management in Dubai.
"It is extremely important that you take the time to carefully plan exactly how much you are going to spend over the festive period and purchase affordable Christmas gifts so that you do not go into debt."
He adds that shoppers should avoid the scenario of putting everything on their credit card.
"You should never think that you can worry about it after the new year, especially with so much temptation all around us," Mr Connor says.
While many of us fall into this trap, consumers around the world are also taking an understandably cautious approach to spending this Christmas. The US-based Gallup poll for October indicates that Americans expect to pay an average of US$715 (Dh2,626) each on Christmas gifts and goodies, just 2 per cent more than last year's dismal holiday sales and well below the $909 forecast in 2007.
Meanwhile, the Christmas 2010: Composition of Consumer Spending report by the Centre for Retail Research in Nottingham, in the UK, suggests Europeans will also be reining in spending over the period.
The report indicates that UK residents will be the biggest spenders, allocating €756.44 (Dh3,670)for Christmas expenses followed by Sweden (€637.31) and Spain (€623.07).
Slightly more restrained are residents in The Netherlands (€442.65), France (€511.87) and Italy (€563.50).
In the UAE, retailers expect a better Christmas period than last year.
"There is a slight sense of optimism, a hint of Christmas spirit, that has crept in over the last month," says Jane Anderson, the managing director and founder of Retail Gem, a consultancy firm in Dubai.
"Retailers are starting to invest more in things like customer service and staff training and new, independent retailers are coming onto the scene, which suggests they expect spending will start up again over Christmas."
And what are people buying?
Despite the belt-tightening, Apple gadgets have knocked cheaper, traditional toys off children's Christmas lists this year.
The iPhone 4, iPod Touch and iPad are the Top Three must-haves in 2010, according to Duracell's Toy Report.
More than two thirds of 2,138 children quizzed wanted Apple gadgets, including nearly one fifth of children between five and eight.
Other popular children's gifts expected to weigh down parents' pockets, according to the UK Toy Retailers Association, are the FurReal Go Go Walking Pup, which retails for £59.99 (Dh347); Moon Dough - plasticine that doesn't dry out (£19.99); Lego's city airport (£84.99); the Jet Pack Buzz Lightyear doll (£39.99); and the Kidizoom videocamera (£59.99).
Online marketers will be the biggest winners, with internet sales expected to represent 10.3 per cent, or €32 billion, of total European sales this Christmas, compared with 8.3 per cent (€25.7bn) in 2009, according to the e-commerce advisory body eMarket Services.
Phillip and Gabrielle Meyer, who live in Abu Dhabi and have family spread across the UK, Europe and North America, say they went online for all their Christmas shopping this year.
"We experimented with it last year, but we visited most of our family over the period so it was nice to be able to hand them the gift with a hug and watch them open it," Mrs Meyer says.
"This year, we're taking our three-year-old daughter to Oman for an intimate family celebration, so we won't be seeing anyone.
"Buying online saved us hundreds of dirhams in postage - we always end up sending some gifts express - and the angst of all that wrapping and running around the shops."
A quiet Christmas can also ease the cost of entertaining, decorating and Christmas fripperies such as bon-bons and party favours.
Katie Philips, an Australian living in Dubai, says two years ago, her husband, 16-year-old daughter and 15-year-old son, were shocked when they tallied the bill for their Christmas celebration and realised how much was spent on unnecessary items.
Last year, they took the drastic step of forgoing presents, instead giving each other money to buy items they really needed or wanted at post-Christmas sales.
"It was OK, we still had a Christmas tree and a big Christmas lunch so we weren't completely 'bah humbug', but Christmas definitely lost a lot of its excitement," Mrs Philips says.
This year, the family has taken the middle road. "We're giving gifts, but we're not going overboard."
They also plan to break the Christmas lunch tradition by eating out, meeting friends at the Jumeirah Rotana, which offers a Christmas brunch for Dh225 per person.
"Cooking Christmas dinner at home is not really a cheaper option," Mrs Philips says.
"In the past, we would always invite people around, colleagues and friends who don't have family here.
"Last year, there were eight of us and I would have spent well over Dh1,000."
The Philips and their guests feasted on turkey, traditional English vegetables and Christmas pudding.
Then, of course, there's all the extras.
"I remember the last-minute shop for smoked salmon, bon-bons, and nuts and things cost over Dh300," Mrs Philips says.
"The turkey cost over Dh70 a kilogram and took hours to cook. There was endless washing up - it all became a bit of a nightmare.
"We enjoyed it, but for people looking to save money by cooking at home I would definitely recommend buying a frozen turkey, which sells for as low as Dh16 a kilogram at Lulu."
Mr Connor says it is a good idea to stick to a Christmas gift and entertainment budget.
"You can include this in your monthly budget by putting money away for Christmas each month throughout the year," he says. "But this obviously requires a high level of self-discipline.
"Budgeting may not seem like a lot of fun, however, all it means is that you have to be more creative when choosing the gifts. You can also plan ahead through comparison shopping online or even ordering most of your gifts online."
Michelle Sequeria says her family - husband Melville and their two children, Aaron, 12, and Joshua, nine - usually stay in Abu Dhabi for Christmas. This year, however, they are travelling home to India to attend two weddings during the Christmas period.
"We've been planning to go home for a number of years, but my husband usually works," Mrs Sequeria says. "This year, he's got leave and the children are off school."
The Sequerias have extended family in the UAE and each year they decorate their house and celebrate together. They typically start planning Christmas a couple of weeks before the big day by putting up the tree and other decoration.
Mrs Sequeria says most Christmases she will spend about Dh200 each on her children and buy gifts for nine or 10 close cousins.
"It's a bit lavish, but it's Christmas. We try to be practical. My husband and I haven't given each other gifts for some years now."
The Sequerias celebrate on the day with an extended family feast, taking it in turns to host the event.
"We hosted dinner two years ago," she says. "I planned the menu early, all Indian food.
"If you order all the food in it gets quite expensive, so we balanced between food we had ordered and food we prepared at home."
The celebration for 20 guests cost about Dh500, not including gifts.
"It's expensive, but we only host every few years and we only spend what we can afford. I wouldn't host a party that I couldn't afford," she says.
Last year, Mrs Sequeria's cousin hosted the dinner, hiring a party hall at the Foodlands Restaurant. She admits that this approach was better than having it at home because there was plenty of space and all the food was provided.
"All we had to do was turn up with our presents," she says.
"I don't know how much it cost, but I definitely think it would have been a more expensive option."
This year, the Sequerias have had to budget for airfares and new clothes for the weddings, but have been planning the trip for many months so are prepared for the extra costs.
"I don't have any tips really on how to not overspend at Christmas time. Just budget and be careful; it's easy to get carried away.
"Also, it's important to remember that Christmas is not just about sweets and presents.
"I think many people forget about the spiritual side.
"Sometimes when we go home again we organise a lunch for children at the local orphanage. This helps bring Christmas back where it should be, the spirit of helping and giving.
"This really helps us to appreciate the Christmas we have."