How to avoid the Christmas credit card splurge!
With Christmas Day just a few weeks away, it’s a good idea to plan your spending and stick to a budget to avoid falling into the festive season debt trap.
With festive spirits high, the Christmas period is the time when families are most likely to under estimate the financial burden. Often people forget about the myriad of other expenses beyond presents, such as food and drinks and of course any travel expenses such as petrol and accommodation.
The good news is that it’s never too late for those who haven’t yet considered budgeting for the Christmas period. Here are a few tips:
• Reflect on last year …consider how much you spent last year and what you could have done without. How much difference will it make?
• Make a list …make a list of all the expenses you can foresee during that period, including presents, food, alcohol, flights, accommodation and decorations.
• Draw a line …buying Christmas presents can be the most costly of all, so allocate an overall budget for presents and divide it among your list of friends and family and stick to it.
• Do it differently …as families grow so does the financial outlay for presents. Consider doing a draw whereby you only buy for one immediate family member.
• Plan ahead and do your research …write down who you’re buying presents for and what you’re wanting to buy before you step foot in a shop to avoid buying on impulse.
• Avoid getting swept up …it’s easy to get swept up in the moment and buy things that were not originally budgeted for or spend a little over the budgeted amount – it all adds up.
• Think outside the square …why not take the opportunity to show your creative side. Often things you make yourself are more personal than something you’ve bought in a store.
• Keep track …hold on to receipts so you know exactly how much you are spending which could assist with budgeting in the future.
• Be a bargain hunter …don’t be afraid to take advantage of the pre Christmas sales, no matter how far out from Christmas they are.
• Avoid credit …avoid using high interest credit cards or store cards unless you know that you will be in a position to pay it off. If in fact you must use credit, choose a personal loan so the amount is fixed and will not blow out as it can with a credit card. It also gives the advantage of shopping with cash and achieving a better discount on a chosen item.
• Start early for next year …start your savings a few months before Christmas. Check if your financial institution offers a high interest Christmas savings account that automatically deducts money from your pay to give you a lump sum in time for Christmas.
To make saving for Christmas a little easier, we’ve developed an easy-to-use online budgeting calculator, together with a Christmas Club Account designed to help customers save for their Christmas related expenses.
The Christmas Club Account features a limited access option, a higher rate of interest, no monthly account keeping fees and the option of having part of your wage deposited directly into your account.
No one really notices a small amount deducted from their wage each week, and it’s comforting to know that when December comes around you have a lump sum ready to spend without having to rely heavily on credit cards.
The last thing we want people to do is start 2013 with financial difficulties so we’re advising people to plan ahead to avoid a festive season credit card hangover.
^Wayne – Chief Financial Officer