Stay on track this Christmas
It’s that time of year again when the spirit of giving takes hold and we are tempted to go overboard on presents and holiday cheer. Ryan Fennell offers advice on avoiding a post-Christmas financial hangover
Can you believe Christmas is just around the corner?
The arrival of November is often a reminder that it’s time to start shopping for presents and buy all the trimmings of the festive season.
Christmas can be a wonderful time when the family gathers and special memories are made.
But it also brings with it the temptation to get caught up in the trappings of the season and overspend on gifts and holiday cheer.
It is not only the presents and decorations that put a dent in our savings. There is also the cost of festive food, school holiday activities to entertain the kids and possibly some travel or accommodation expenses too.
But when the decorations come down and the tree is packed away, one thing often remains – debt.
If this sounds familiar, be assured you are definitely not alone. Research by Finder shows the average Australian credit card holder faced up to $1,863 in post-Christmas debt in 2019.
More than one in four Aussies will still be paying off that debt in 12 months.
It is not a great way to start a new year and will only leave you worrying about how you will afford next Christmas.
Instead, I would encourage you to take charge this Christmas and be realistic about what you can comfortably spend.
Let’s look at five ways you can start 2020 in great financial shape.
1. Plan ahead
Write a list of who you need to buy gifts for and set a firm budget for each. Be realistic about what you can afford and don’t go over budget. Let family and friends know you are keeping it simple this year and welcome them to do the same. If you find something on sale, don’t go and buy something extra because you got a bargain.
2. Start shopping now
Leaving it until the last minute causes overspending because you don’t have time to shop around. Start now and research online for the best deals. Keep your gift list in the notes section of your phone and tick it off as you go. For the kids, be mindful of quality over quantity and resist lots of plastic toys that will end up in landfill.
3. Avoid spending on credit by withdrawing cash before you hit the shops
Beware of buy now, pay later services such as zipPay and Afterpay as it is easy to lose of track of how much you owe. A good portion of their revenues come from penalties on late payment.
4. The excitement of Christmas and spirit of giving can make it easy to justify using the credit card more
Keep a close eye on your use of credit and “tap and go”.
5. Think about your financial goals for the future
It might not seem very festive, but it will motivate you to control your spending.
Really though, there is one way to remain in great financial shape this Christmas – keep track of your household cash flow. Knowing exactly how much you can comfortably spend, and having techniques to stick to it, will allow you to have a fantastic Christmas now, and a stress-free new year.
Ryan Fennell, Shane West and Jarrod Owen of The Fennell West Unit Trust trading as Fennell West are Authorised Representative(s) of GWM Adviser Services Limited ABN 96 002 071 749, an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies. Licensee No. 230692. Any advice in this article is of a general nature only and has not been tailored to your personal circumstances. Before acting on this advice, you should consider whether it is appropriate having regards to your personal objectives, financial situation and needs.