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Avoid Debt at Christmas

16th December, 2016No Comments

Santa is on his way! Unfortunately for many Aussie families, so is a barrage of emotional spending and pending financial pressure.

Christmas time in Australia is also summer time, party season, the silly season, school holidays and New Year’s Eve. It’s easy to get carried away with presents, social events, new outfits, extra food in the grocery shop, booze and extra holiday activities which can put a lot of pressure on your budget.

Not only is it a busy time of year, but marketing and advertising companies take full advantage of Christmas and bombard you with messages, almost pressuring you into buying gifts and items you might not be able to afford in order to provide the ‘perfect Christmas’.

If you aren’t careful, the holiday season can burn a huge hole in your pocket and leave you stressed and struggling in the New Year. Here are a few tips to help you get through Christmas unscathed and financially prepared for the year to come.

Limit your gift giving

By the time you get through the kids, the immediate and extended family, teachers, colleagues and friends, you might feel like you are buying presents for your entire town. Here are some ideas on how to still be festive and give presents without breaking the bank.

  • Set a spending limit for immediate family gifts – this way you can control your budget, but still spoil your loved ones with something nice.
  • Do a Secret Santa with friendship groups or colleagues – everyone still gets a present but you only have to buy one and you can set spending limits on these too.
  • Rather than buying gifts for your family, maybe you can all put money in for Christmas lunch or dinner. This removes the stress off one particular person to feed the masses.
  • Handmade gifts, such as gingerbread men in cute packaging are good to give as little presents for lots of people. The ingredients might cost a bit initially, but you can make several batches to cover a lot of your gift list.

Think outside the box

Not everyone needs a materialistic present. Do you know a new mum? Present her with a card offering your services as a babysitter so she can go out and get a coffee baby-free. Do you have an elderly neighbour? Offer to go over once a week and give their house a tidy up. There are plenty of things you can do for people without spending money on them, and while it might not seem much – these small acts of kindness are often more valued by the recipient than a knick-knack you purchased.

Don’t use your credit card!

Too many people put Christmas on layby with their credit card and intend to pay it off in the New Year. But then the next lot of monthly bills arrives, you receive your rates notice and the school fees are due. All hope of paying off those credit cards flies out the window and you are suddenly dealing with all your bills, the money from Christmas and a mounting interest rate.

If you need to put it on your credit card, you can’t afford it and you should go without. It does sound harsh and maybe even impossible, but you can use some of these other tactics to avoid putting yourself into debt.

Budget and plan for next year

If you found you have really struggled financially this Christmas, don’t let it happen again. Take note of all the bills that are due in December and January and make an estimate about how much you have spent on presents, extra food and social occasions. In January, start a new bank account and make small contributions throughout the year into your new ‘Christmas Account’. Aim to save all or part of your additional spending to when Christmas rolls around again, you aren’t scrounging through the couch for spare change.

Remember what counts

If you were already struggling with your finances long before Silly Season, try to go easy on yourself. You don’t need to buy into the hype and shower people with gifts, go out for expensive functions or put yourself into further financial stress. You can still spend time with friends, family and loved ones without spending a fortune, and at the end of the day, that’s what counts.

Don’t be ashamed or afraid to tell people you are strapped for cash and can’t afford to go out for expensive dinners or buy expensive gifts. You can always suggest an alternative, like catching up another time at home.

When debt becomes a problem

You don’t have to live with severe financial hardship. There are a number of solutions available to you to help you reduce and repay your debt. If you want to get out of debt and get your finances back on track, give us a call on 1800 00 3328. We can tailor a debt relief solution to your situation and help you get out of debt and stay there!