/* @var \App\Domain\Entities\BlogArticle $item */ ?>
Be ahead of the news in accounting, private wealth and finance
Around this same time each and every year, many Australians start to say to themselves “I will NOT go back to work after the Christmas break with silly season debt!” And yet, come 5 January when the majority of us return to work, here we are with the remnants of Christmas wrapping, a dried out pine tree and several hundred (or gasp – thousand!) dollars of unintended consequences lingering on our plastic cards.
Financial Adviser Mark Maddern gave us his tips on how to avoid a financial holiday hangover.
– Decide in advance how much you plan to spend at Christmas. Write a list of every person you need to buy a gift for and set a budget. Then brainstorm ideas on what to buy for them – going to the shops with no idea tends to create impulse purchases that may end up being outside your planned spend. Likewise, if you buy well in advance of the actual gift-giving day you will be less likely to spend more out of desperation because you didn’t have time to look around.
– Consider implementing ‘Pick a Gift’ or Kris Kringle — each person in your family or friendship group draws a name out of a hat for ONE other person and only buys that person a present for a set amount. Everyone gets a gift without spending lots of money, in-fact people may end up with a better gift because the budget will no doubt be higher than if you were buying for a large group of people.
– Put away a few hundred dollars each pay (or less if you are paid more frequently) into a savings account. Call it your Christmas account. Don’t touch the money until Easy.
– It may sound old-fashioned, but use lay-by for your gifts! Yes, believe it or not but lay-by does still exist. For those of you unfamiliar with the concept (don’t laugh, many people have never used lay-by given our tendency to prefer the instant gratification of an immediate purchase), the lay-by system works by leaving a deposit on an item, and making regular repayments until said item is paid off. You don’t pick up the item until it is paid off, the psychology of which usually means you will pay it off faster than had you used credit.
–Plan your festive season social calendar in advance. Look at all of your social engagements in advance and plan for the cost of each. Will you be out for expensive dinners or can you invite friends to your place or meet for a BBQ in a park somewhere? Would it be cheaper for you to hire a babysitter instead of paying for your kids to eat out at restaurants when they may not appreciate it?
–Pay cash to meet your expenses. It sounds like advice your grandmother would give, but I bet your grandmother didn’t end up with credit card debt after Christmas. It’s quite amazing how the psychology of taking out cash from your account works. When you limit yourself to a set amount of money for the festive period and physically see it leaving your account or your wallet, your interactions with spending are more conscious than the simple swipe of a card through an EFTPOS machine.
We hope that these tips will help to tame your spending this Christmas. If you do need assistance with budgeting or paying off you festivity transmitted debt you can arrange a complimentary appointment to see one of our Independent Financial Advisers by contacting us here.
Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any financial decisions or consult the advice of an accountant or financial adviser.