A stocking full of debt is not something that anyone wishes for. It goes without saying that Christmas is the biggest splurging time of the year and there’s pressure to spend more than you can afford.
The pre-Christmas and Boxing Day Period runs from the final two weeks of November right up to New Year’s Eve – a total of 46 days – and the National Retail Association (NRA) is expecting more than $48.1 billion to be spent during that time! That works out to be more than $1 billion per day.
First of all, let go of your competitiveness. Realise that every persons Christmas traditions are different and it doesn’t need to be a competition with anyone else, especially financially. Christmas is what you make of it and can be as special as you allow it to be.
We buy, spend, eat and drink a lot more than we need to or should over the Christmas season. It’s surprisingly easy to cut down on all these expenses if you don’t want to blow the budget. For example, use the decorations from last year or make your own instead of buying new ones (Hint: Pinterest), and think twice about the food and drinks you really need – 3 types of dessert may be overkill.
There are many things we can do to stop the Christmas debt hangover these holidays, and some of these include:
- Figure out your expenses
There are a little over five weeks from now until Christmas. Work out how much you can afford to put away between now and then to cover gifts, food, entertaining, property and travel expenses. Just because you are on holidays, doesn’t mean the bank is. Setting a budget is the first step to know how much you can afford. Also take into account when your salary will come into your account after Christmas, some transactions can get delayed with the public holidays so ensure you have additional funds to cover you for any delays.
- Buy the necessary items first
From your budget, pay the non-negotiable items off first (accommodation, Christmas lunch etc), this will give you an idea of where you are sitting financially for the remainder of your spending. Most food items can be purchased in advance, keep an eye out for food and beverage specials to ensure you get the best deal.
- Debt free Credit
Rule of thumb – if you can’t afford it, don’t buy it. You don’t need to be paying off credit card debt through the first half of 2019, if you can avoid it, don’t use your credit card, take out the total amount of cash that you want to spend and only pay with cash, you can visibly see it and know what you’ve got left. If you have to use a credit card, focus on getting through your most expensive debts first, one by one. Don’t forget to pay at least the minimum amount on all of your debts to avoid additional fees and charges.
- Avoid Afterpay and zipPay, like your life depends on it
This is where you can get caught out, small amounts appear manageable at first, except when you do it across multiple purchases and then all of a sudden it adds up and stretches the budget into the new year. These services are advertised as ‘interested free or 0% interest, but the cost will add up if you can’t make the repayments on time.
Late fees – There’s usually a late fee every time you miss a payment or pay late. These fees can add up over time and are charged each time you don’t make a payment.
Monthly account-keeping fees – Some of these services charge you a fixed amount for every month you continue to use their service.
Payment processing fees – You may be required to pay a fee for each payment, on top of your set repayment.
- Most importantly, Just enjoy it
Last but not least, it is important to remember that you can have great fun over Christmas irrespective of how much you spend. And saving money doesn’t mean you have to stay at home either. Canberra has lots of free things families can enjoy – from picnics, walks, community activities. Do a little bit of research – you might be surprised just how much is on!