Australians are estimated to spend $10 billion on Christmas gifts this Christmas. It’s definitely an expensive time! So how can you have a happy Christmas but not end up in financial despair.

Danger Warning - Credit Cards

Credit Cards can be seen as a convenient way to buy things now and paying them off but you effectively end up spending more with the high interest rates that average around 20%. So if you’re putting on a card, add another 20% to that price. If you think you’ve found a bargain at $89, is it so much of a bargain when you’re probably going to pay $107 if you pay off the debt by next Christmas. Currently there is more than $30 billion in credit card debt held by Australians, with an annual interest cost that is likely be around $6 billion. With a good chunk of the $10 billion from Christmas shopping to be added to that shortly, these interest costs will only rise. If you can’t afford it now, how can you afford it later plus interest?

Discipline

Decide on your limit per person and stick to it. So if you’ve budgeted for a present of say $50, this means sticking to it or alternatively, spending less on the next present to even it out.

Budgeting

Ok so you might not have too much time to do this now but maybe be mindful for next year. Consider all the people that you need to buy presents for, travel costs and food & drink that need to be paid for and decide on a reasonable amount that you want to spend in total. Divide this by the number of pay cycles you will have before next Christmas and start saving.

Smart Shopping

There are plenty of shops online and while a trip to the local shopping centre can be a good one-stop-shop to get things done, they can also be expensive. Shop around to ensure you’re getting the best deal.

Conclusion

Whatever you do, don’t spend beyond what you can afford! Christmas is a magic time to be enjoyed by all but hopefully free of money worries!

In preparing in this article we have not taken into account any particular persons objectives, financial situation or needs. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain financial advice specific to their situation before making any financial investment or insurance decision.