Avoiding debt during the holiday season

While the festive season brings with it family time, after-work parties and Christmas movies, many often forget the ‘debt hangover’ that follows well after the holidays end. A recent study shows that 1 in 3 Australians entered 2020 with debt from Christmas – unsurprising, when the nation spent close to $28 billion on credit cards in December 2019*. While majority of people pay this off by the time Mad March hits, there are some that take until May to recover from their ‘debt hangover’.

To help your credit card stay in the green this holiday season, we have put together some tips so that you can enjoy Christmas without the post season debt.

Make a budget – and stick to it

The best thing you can do to ensure that you remain debt-free this holiday season is to make a budget and stick to it. Sit down and write a list of all the people that you need to buy gifts for, and then either assign each person a spending limit or allocate a total amount of funds for the whole list. While this may go against the gift-giving attitude many have during Christmas, it helps you decide on a set figure to stick to, and discourages impulse buying when you find another ‘perfect gift’ for a friend or family member.

It is also worth creating a budget for other holiday expenses, such as food, decorations and festive gatherings. Ensure that each time you spend money in that category you are keeping track of it – you might find that you were previously unaware of how much you were spending on not only gifts but also the cost of hosting the family lunch, all of which can add up very quickly.

Pre-empt the spend

Christmas happens once a year, every year. We all know that the holiday season is coming, so putting a set amount of money aside each month during the year helps offset the spend in December. While it may be too late this year, ensuring that you are putting aside $20-$50 a month as January rolls around will help when you go to buy Christmas gifts and food later in the year.

And for an added bonus, signing up to free membership programs such as flybuys will allow you to shop as normal during the year while building up rewards points. These can then be redeemed during Christmas time at participating stores, potentially saving you hundreds towards gifts or food items.

Get in early

Present hunting during December can be costly and stressful, so getting in early can save you huge amounts of time and money. Throughout October and November, retail stores have sales for the changeover of seasons and other special days. Taking advantage of sale events like Click Frenzy, Black Friday, Cyber Monday and instore Christmas shopping days are a great way to receive some major savings. However, if you are not a fan of instore shopping, online retailers often offer discount codes or free shipping if you sign up to their newsletter or create an online account – a great way to save some extra money.

Get creative

At the end of the day, it is the thought that counts when you are gifting presents to your loved ones. If there are some people on your list that you want to give a gift to but you are running out of funds in your allocated budget, get creative and cook, build or op-shop for presents. If you know your friend or colleagues love cookies and rocky road, jumping into the kitchen and baking it yourself is one of the best ways to show how much you care, and really embraces the Christmas spirit.

If you think that you are ready to start the home buying journey, contact HomeStart today and take the first step in getting into your own home, sooner.

*One in three Australians start 2020 with a ‘Christmas debt hangover’, news.com.au