Holiday Spending Blowout
You've had a huge spending blowout over the Christmas holiday break, so what now? Obviously we can't go back on the luxury presents, Christmas outfits, holiday lunches and dinners, festive drinks and extra entertainment but we can work out what to do nextÂ…
It has been estimated that Australians spend $15 billion each December for the Christmas holiday season. Most of this spending is on the credit card and we spend the next year paying the debt off.
If you used your credit card it is important to work out how you will pay off that debt as quickly as possible. That piece of plastic in your wallet causes more problems, than the initial holiday budget blowout, when the interest begins to add up. Begin paying off what you can of your holiday spending as soon as possible; this will decrease the interest you pay at the beginning of February. It is also important that you do your best to not use your credit card until all of your holiday spending has been paid off!
If you know you have already spent too much at Christmas don't get pulled in by the half yearly or after Christmas sales, most of the items you are splurging on are on sale during the end of financial year sales or at other times throughout the year. Ask yourself 'Do I really need this?'
If you do have any cash left, go to the after Christmas sales and buy the Christmas goods you need for next year at 50% off, think Christmas cards, wrapping paper and gift cards.
Christmas although magical is expensive - use the year to save for the season, even putting away $10 a week means you will have over $500 saved for Christmas in a year. You can save $10 a week quite easily; limit your take-away and dining out or stop buying your morning coffee, or take your lunch to work instead of buying it; each of these saving tips will often save you more than $10 a week to put towards Christmas. You could also chose generic brand food over brand name products, most of the time the items are the same but are half the price.
Even though Christmas seems so far away, it always creeps up on us, start planning your gifts and saving for the season now. Write a list of what you will need to buy and the cost associated- this can be done at any time during the year. The list can include gifts, travel, food, drinks, outfits, decorations and some spare cash for hidden extras. It can be hard to choose a gift for everyone in advance but begin saving for presents and create a realistic budget.
Remember it is okay to make gifts, cook treats or create hampers for family. You could also ask your kids to help you create hand-made Christmas cards; you can use drawings or photographs. Hand-made cards often are cherished longer than printed cards and can be cheaper!
If you still would like to purchase presents, look online. Online stores often offer free delivery or discounts in December and they could be cheaper than a store as they have lower over-head costs. Retail stores still allow you to layby, so you can pay off presents as you get paid. Check how long you have to pay off the item before committing to the contract.
Think about 'Kris Kringle' or 'KK' where you buy one gift for each family member, with a set budget. Everyone buys and receives one gift and this saves receiving excessive, unwanted presents. Kris Kringle also makes Christmas much more affordable and means there is less debt and stress in the new year.
If you, like most others overspent at Christmas, don't let it ruin your new year, take charge of your debts, pay off the credit card, or at least minimise the debt. Choose a method that works for you and get organised so you can ensure you're not in the same trouble next Christmas!
Brooke Hunter