If ever there was a popular time to go into debt, Christmas is the choice of many. According to a Reserve Bank report, Australians have more than $1.9 trillion in outstanding debt, 61 per cent of which is made up of consumer debt. The festive season may well blow-out this already inflated figure unless we reign-in our spending.
While the essence of Christmas is sharing, this doesn’t mean running your bank account dry with gifts you can’t afford. With a little planning and restraint you can stay debt-free and still keep the spirit of Christmas alive. Here’s how…
Make a plan. Instead of wandering around the shops not knowing what to buy, make key decisions in advance. Write down a list of friends/family/colleagues you are giving presents to and next to each name put a maximum dollar value for the gift plus any ideas you have for presents. Do the same for decorations, food, entertainment and holiday expenses. Total these figures and make sure they stay within your budget.
Resist impulse buying. When you have a list, stick with it. You might see a bargain, but if it is over your budget, keep walking! Allow plenty of time to do your Christmas shopping to avoid last minute expensive purchases.
Use credit wisely. A separate bank account for Christmas savings is a great idea because you know where the money you spend is coming from. It’s easy to accumulate debt without even being aware of it, so leave your credit and store cards at home if you are tempted to spend money you don’t have.
Be thoughtful. Remember that a gift from your heart is far better than one from your wallet. A home-made present or a gift of your time can show your love and appreciation far more effectively than an expensive gift with little thought behind it.
Show commitment. Be sensible today to reap the rewards tomorrow. If you are serious about staying out of debt, be committed to make it happen.
Seek help. Ask for help sooner, rather than later. We would encourage you to contact us for any assistance you may need to cope with festive season spending.