Looking forward to the festive season but worried about the impact it will have on your wallet? You’re not alone. Many Australians feel financial pressure in the lead up to Christmas. With a little planning, you can enjoy the festive season without it breaking the bank account.
Get on top of your finances
Did you know that Australians who apply for a credit card in the three months before Christmas are 20 percent more likely to default on their repayments? Many of us tend to overspend during the festive season — only to find ourselves starting the New Year with a fresh lot of debt.
With Christmas expenses adding to your ongoing financial commitments, there’s a strong temptation to reach for your credit card to cover all your costs. But by keeping your credit cards in your wallet over the holiday season, you can greet the New Year with your finances under control.
Budget for festivities
Last year, 60 percent of Australians spent more than their income over the Christmas period, which saw them dipping into their savings or maxing their credit cards. You can avoid this by setting a realistic budget and finding practical ways of sticking to it. For instance, if you’re heading out for a night on the town, take the amount of cash you’ve budgeted for the occasion and leave the cards at home. Or, if you’re going Christmas shopping, put the exact amount you can afford to spend on each person in an envelope with their name on it and don’t go over that amount.
As well as factoring in gifts, you may need to put aside extra cash for things like entertainment, eating out and travel. And remember that you still have to keep up with your regular expenses, such as bills and mortgage repayments — so make sure you budget for those too.
Think long term
By setting up a budget early and sticking to it, you’re less likely to splurge on gifts or entertainment you simply can’t afford. After all, it’s called the silly season for a reason and, it can be too easy to forget our future plans while we’re caught up in the festivities of Christmas and New Year. But it’s important not to lose sight of your long term financial goals — even if it means cutting back a little on Christmas indulgences.
Get professional advice
If you want expert advice in how best to manage your finances this Christmas, speak to Victoria.
This information has been prepared by GWM Adviser Services Limited ABN 96 002 071 749 AFSL 230692, a National Australia Group Company, 105-153 Miller Street, North Sydney NSW 2060 Australia.
*Christmas credit crunch warning: New data reveals pre-Christmas applications most likely to cause credit default pain. Veda Applied Intelligence.
*Christmas Shopping: How Australians Spend Their Money During The Silly Season. Pocketbook.