'Tis the season to be cost-savvy

Year-end festivities involve joyful time spent with loved ones and friends. However, for many of us, our expenses tend to spike during the holiday season.

But if you go into the holidays with a clear spending plan, it will save you from a hangover when you receive your bills later.

United Overseas Bank (UOB) says its customers traditionally spend the most during the year-end festive season.

"Between November and December, we typically see an average growth of about 15 to 20 per cent in billings over the two months, compared with the first 10 months. This is usually led by strong overseas billings growth (about 30 per cent)," the bank said.

Ms Jacquelyn Tan, UOB's regional head of cards and payments, said: "In terms of spend category, retail makes up more than 30 per cent of card billings, as UOB customers enjoy the competitive deals and discounts offered by both brick-and-mortar and online retailers."

Planning ahead enables us to avoid being overzealous and going overboard with our holiday spending, at the expense of our savings and financial planning goals.

 

Here are some tips for your holiday spending.

HAVE A PLAN

While it is important to enjoy the festivities, don't lose sight of your expenses. It is prudent to decide upfront how much to set aside for expenses such as gifts, the party buffet, decorations and the year-end vacation.

"Set a realistic Christmas budget that you know will not burn a hole in your pocket. Keep a log of what you are spending for Christmas so that you are aware of how much you are spending and stay within your budget. Remember to always be disciplined with your finances even as you enjoy the year-end festivities," said Mr Vasu Menon, OCBC Bank's senior investment strategist.

One way to to do so is through using apps.

"You can download an expense-tracker app on your mobile device, so you can set a budget and update it each time you make a purchase. This is a convenient way to track your expenses on the go, and ensure you are not overspending," Mr Menon added.

Some mobile banking apps, such as OCBC Money In$ights, have an integrated personal finance manager, which is useful for customers to manage budgets and track their finances in real time.

Budget apps recommended by financial experts include Wally and Mint, both of which can be downloaded on your mobile phone. They help you track your expenses and achieve your personal finance goals.

START EARLY

Why wait till the year-end to shop and buy gifts? Looking out for suitable gifts throughout the year helps to reduce the stress and prevents a huge spike in year-end spending.

Create a gift list and keep track of items that are appropriate or that a loved one has expressed interest in. It also helps to stock up on some generic gifts that will come in handy.

This way, you can put post-holiday and seasonal sales to good use by making purchases at a discount while spreading out your spending.

It is also prudent to start budgeting for your year-end spending at the start of the year. So by the time you use it, you would have a tidy sum in your account.

USE REWARD POINTS

Financial experts suggest that you accumulate your credit and loyalty cards' reward points and use them to finance your year-end spending so as to lessen your financial burden during the festive period.

You can consider converting your reward points on your credit card and even cellphone bills into shopping and meal vouchers that you can use for your Christmas spending, said Mr Menon.

One activity that has gained popularity among Singaporeans is staycations.

Ms Tan said: "Staycations are becoming increasingly popular, as Singaporeans take advantage of the competitive rates and suite of offerings provided by local hotels.

"UOB cardmembers who are planning to enjoy a change in scenery while staying within the country can choose to offset their staycation charges by redeeming their UNI$ (a UNI$ is part of the UOB reward system). Alternatively, they can use the UNI$ earned from their year-end spend to redeem air miles or other rewards."

ONLINE DEALS AND PROMOTIONS

During the Christmas season, you can find good promotions and online deals to keep costs down. Look out for these deals in the newspapers and on the Internet, or check with colleagues and friends who may be aware of deals offered by online apps as well, said Mr Menon.

These annual online sales include Singles' Day, Black Friday and Cyber Monday.

Mr Rohith Murthy, managing director for personal finance comparison portal SingSaver.com.sg, suggested using an online-shopping credit card, such as the Standard Chartered SingPost Platinum Visa Card, to get the most benefits out of your spending or to get cashback savings.

And if you have a Citibank credit card, you gain access to the Citi Globalshopper programme, which gives you 5 per cent cashback all year round every time you ship with VPost or Borderlinx.

UOB economist Francis Tan noted that the year-end holiday season is traditionally a peak travel period for many, especially parents with school-age children.

"Given the weak regional currencies, consumers with a yen for travel could be choosing South-east Asian destinations to maximise their purchasing power. This is aided by the increasing number of flights within the region, resulting in more competitively priced flights to these destinations."

According to the UOB Affluent Consumer Survey (Singapore), Malaysia (40 per cent) and Thailand (32 per cent) were the top two destinations for vacations among respondents over the past 12 months. Respondents said travel expenses are a key consideration, besides location and climate, when planning a holiday.

Ms Tan advised considering various travel-related promotions from your banks, and travel websites such as Expedia, Kaligo, Agoda or Hotels.com to stretch your holiday dollar.

• UOB's Ms Tan suggests checking out travel websites such as expedia, Kaligo, Agoda and hotels.com for holiday deals.
• OCBC bank's Mr Menon advises having christmas pot-luck meals and parties at home instead of eating out.
• Singsaver. Com.sg's Mr Murthy suggests using a web-shopping credit card to get cashback savings.
• UOB's Mr Tan notes that choosing south-east asian holiday spots could maximise your purchasing power.
• DBS bank's Mr Seow advises paying in the local currency for overseas purchases, where possible.

SAVINGS ON OVERSEAS BUYS

If you're making an overseas purchase (whether while travelling or making an online purchase with a store based overseas), you will sometimes get the option of paying in Singdollars or in the local currency.

Mr Anthony Seow, DBS Bank's head of cards and unsecured loans, advises that, where possible, you should always try to choose to pay in the local currency.

"For example, if you're asked by a United States-based store on whether you wish to pay in US dollars or Singdollars, you should choose US dollars. This is because the exchange rate used in such situations are set by the merchant and are usually not favourable. Additional fees may be charged by the card networks as well," he cautioned.

HOME-COOKED MEALS

Having meals at restaurants and catering save time and effort while home cooking costs less.

To find out how much more catering costs, SingSaver checked out the cost of five caterers - assuming similar menus comprising 10 items for 30 people - with the ingredient cost of cooking at home. SingSaver found out that home cooking can give as much as 60 per cent savings.

Mr Menon suggested having Christmas pot-luck meals and parties with friends at home, which can be much cheaper than going to restaurants.

"Cooking and dining at home for family gatherings may be more meaningful... Enjoy the company of your loved ones in your own home instead of a restaurant, which can be impersonal. Remember that what matters are good company and a good time, which do not always require dining outside of home," he said.

Should you still decide to cater, do make your booking early so as to enjoy discounts and complimentary side dishes.

WHEN SPENDING OVERSEAS...

Take precautions to avoid unauthorised or fraudulent transactions when using your plastic outside Singapore.

One way to do so is to use your credit card's EMV chip function by "inserting" the card into the payment terminal instead of swiping the magnetic stripe, whenever possible, when shopping overseas.

Mr Seow said: "The EMV chip is more secure as it creates 'dynamic data' every time you make a transaction, making it nearly impossible for fraudsters to duplicate or clone your card.

"You can enable your card's magnetic stripe if you are travelling to a country that is not fully EMV-compliant but ensure you set the enablement to expire shortly after you return from your trip. This can be done through the bank's Internet or mobile banking channels."

Bank promotions

• DBS/POSB

  During the Christmas season, up until Dec 31, customers who spend at least $250 on their DBS/POSB credit or debit cards can redeem cash rebates or gifts via the DBS Lifestyle app. DBS/POSB customers can also enjoy special one-for-one deals and discounts. To find out more, visit lifestyle.dbs.com.sg.

  OCBC

  OCBC Titanium cardholders get 10 times OCBC$ for every dollar spent locally, overseas, online or offline in categories such as clothes, bags, accessories, shoes, department stores and gadgets.

  From now to Dec 31, all OCBC cardholders can enjoy up to 30 per cent off festive dining and goodies across 12 outlets, including Cafe Swiss, Equinox, Prego, and Mikuni in Fairmont Singapore and Swissotel The Stamford.

  UOB

  UOB's Privileges Passport is a regional reward programme that offers cardmembers access to exclusive local benefits while travelling in Singapore, Indonesia, Malaysia and Thailand.

  In addition, UOB cardmembers stand a chance to receive up to 60,000 KrisFlyer miles which can be redeemed for a round-trip ticket to London or Los Angeles, by simply charging $300 overseas in a single receipt.

  The bank is giving away the equivalent of 10 million KrisFlyer miles in total as well as 500,000 travel-related prizes until Jan 31.

  
  This article was first published on Dec 04, 2016.
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