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Planning for a debt free Christmas


No one likes a hangover and especially the debt hangover that many people experience after indulging in a little too much Christmas spending. With Christmas just around the corner, how can we ensure we are financially prepared for the silly season?

Some of us plan well in advance for Christmas spending, but what should you do when it’s just 3 months away? It’s not too late to address the issue of the Christmas Budget – yep, we just said Christmas Budget.

According to the Australian National Retailers Association (Source – SMH), the average Australian family spent an extra $936 in 2014 on Christmas preparations. Armed with that knowledge, let’s ensure you can save enough to cover your Christmas spending and avoid a credit card debacle in January.

The Christmas Budget

The Christmas Budget is a gift you give yourself. Get your Excel on and make a list of all your Christmas expenses (or just write them down).

  • Gifts you need to buy (including how much you want to spend on each gift)
  • Travel or accommodation expenses
  • Allowances for food and drink
  • New outfits for the party season
  • Holiday activities for the kids

How much do you need to save?

Now add up all those costs and brace yourself for the true financial cost of your Christmas. You may want to add a 10% buffer to cover things you haven’t thought of yet. Once you have that figure, use a savings calculator to work out how much you need to save each week, fortnight or each month to reach your savings goal. Let’s say your savings goal is $1000. Given it is the middle of October, to reach your goal by the 18th December (giving you a few days to get your shopping done), you are going to need to save $100 each week. At this stage of the game, you may not have a spare $100 in the household budget, so how can you find that money?

Now might be a good time to consider having a good old fashioned spring clean and garage sale. Perhaps the kids will be ready to get rid of last year’s Christmas presents to make room for some new ones! Consider trying to sell larger and more valuable items on online sites prior to your garage sale. This allows you to set the price or at least a reserve price so you don’t feel too haggled at your garage sale. Of course, if they don’t sell online you can always clear what is left at the garage sale. You never know, you might find enough items lying around the house that you could sell to fund a summer holiday as well. Make some cuts in the household budget. It may be worth cutting back on a few takeaway dinners or nights out to make sure you have the extra dosh to splurge on a dress for the Christmas party or some snazzy champagne to go with Christmas lunch.

The gift that keeps on giving

If you haven’t checked your home loan rates in a while, perhaps it’s time to do a review. You might find that refinancing your home loan could save you money each month, and the best part is that this is a gift that would keep on giving well past Christmas.

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