November 10, 2016
It's beginning to look a lot like Christmas, with the festive season right around the corner.
And while the Christmas period is a very jolly time of the year, it can also be a financially stressful time for many.
“Christmas is a very expensive time of year thanks to the many costs associated with gift shopping and social commitments,” Mortgage Choice chief executive officer John Flavell said.
“And given that interest rates remain at historical lows and consumer confidence is on the rise, I would expect Australians to spend a significant amount of money this festive season.”
According to predictions from the National Retail Association, Australian shoppers will spend approximately $46.5 billion between the end of November and New Year's Eve – or the equivalent of $1 billion a day.
“It is during this time of the year that people rack up a significant amount of unwanted debt,” Mr Flavell said.
“Thankfully however, it is not too late for Australians to start financially planning for Christmas to ensure they don't over-spend this festive season.
“In the first instance, I would encourage all Australians to set themselves a budget that details exactly how much they would be comfortable spending on gifts and social commitments.
“By setting yourself a budget, you will able to clearly identify where you could potentially cut back and cut costs.”
Of course, setting and sticking to a budget isn't the only money saving tip Australians can implement this festive season. Other financially savvy techniques include:
1. Make a list and check it twice
This Christmas season, it is a good idea to write down exactly what presents you plan to buy for your family and friends. Not only will your list help keep you on track when you hit the shops, but it will also give you the chance to see if your gifts can be purchased for less from certain outlets. You may even find that particular items are cheaper online – saving you money, time and the hassle of dealing with crowded shopping centres.
2. Trim the excess
Whether it is buying gifts or organising parties for friends and family, you can always find ways to cut back on your spending. Instead of heading to a fancy restaurant for celebrations, consider having a picnic or barbecue in the park, or throwing a party at your home where guests can bring a dish to share. With gift-giving, you can easily lower the costs by organising a Secret Santa for your family or social group.
3. Re-look at all your spending
While setting a budget for the festive season is a good idea, it is also worth reviewing your entire financial situation at the same time. By reviewing all of your outgoings, you may be able to find some quick ways to reduce your spending. For example, if you plan to go on holidays over the festive season or just want to take a break from the gym, putting your membership on hold for a month could save you up to $60. And, at the end of the day, every cent counts.
4. Stay on top of credit cards
Credit cards can come in handy during the festive season as many providers offer interest free periods. But while it is nice to have the extra time to pay your bills, it is vital you don't let the ‘interest free' period expire before paying off your card in full. Overdue fees and interest charges can be crippling, so make sure you are diligent and pay off your card in a timely manner.
5. Go on vacation without breaking the budget
Going away on vacation with the family, especially if you have children, can be quite expensive at the end of the year. If you're looking to go overseas or interstate, it pays to do your research and look for specials on flights. Alternatively, given that Australia is blessed with fantastic beaches, bushland and everything in between, you may even choose to enjoy a holiday without travelling too far from where you live. Consider renting a holiday home somewhere, but make sure you book early as favourable areas will fill up quickly.