Avoid the dreaded Christmas debt hangover.

The Christmas and upcoming summer holidays are a great opportunity to relax, unwind and spend quality time with those we love.  This time of the year is filled with social festivities, family get togethers and summer BBQ’s, it certainly earns its title as the most wonderful time of the year.

But with Christmas right around the corner, it’s a good time to put a plan into place to ensure you don’t over spend and find yourself stuck with a Christmas Debt Hangover come the new year.

Despite the fun and excitement, the festive season can bring its own challenges.  Purchasing Christmas gifts, hosting large get togethers and taking a holiday all add up to a rather large bill, especially in the current climate.

Whilst keeping your spending in check is important for those seeking to finance a property in the new year, it is equally important for everyone else too.  Starting the new year in the black instead of the red, can set you up for a much better year, help you achieve your financial goals and not inconsequentially, reduce pressure and household stress.

We’ve developed some suggested ways to plan, budget and keep a lid on spending during the festive period:

1.       Make a list and check it twice.  This advice isn’t just for Santa.  Making a clear list of who you need to buy gifts and setting a budget for each person is a helpful start.  It is also a good idea to decide what to buy before you start shopping.  Do some research, come up with the ideas and see where you can find the item for the best price.  Shopping on the fly always leads to over spending, so plan, plan, plan. 

Other options to keep costs down are to consider a family Secret Santa, cashing in on reward points and focusing on affordable but thoughtful gifts instead of expensive standard gifts you can get from anywhere.  If you’re shopping online, try and batch buy form retailers so you can benefit from free delivery (those delivery costs can add up quickly) and if you’re organised early, you can even make the most of Black Friday sales. 

2.       It goes for festivities too.  If you’re hosting a get together for family or friends, it’s just as important to plan for that too.  Plan a menu well in advance, buy what you can over a few weeks so you can buy things when they’re on special and don’t feel like you have to do it all yourself.  When people kindly ask what they can bring, pick something off your planned menu.  It will not only reduce the cost; it will reduce the stress too!

3.       Save on travel too.  When planning a getaway, it’s easy to get caught up in the excitement but this can lead to spending more than you need to.  Set a budget for the entire trip including transport, accommodation, meals and additional spending money.  Consider staying in self-contained accommodation so you can make some meals and don’t have to eat out for every meal.  Planning and booking early is the best way to keep spending under control.

Look out for bargains and weigh up different options to see what fits within your budget.  Consider travelling outside of the busiest times to save on flights and accommodation and check out amusement park/ adventure discount websites which often have great deals.

4.       Don’t get caught in the buy now pay later trap.  Buy Now Pay Later options lull us into a false sense of what we can afford to buy and can quickly throw financial stability out the window.  If you can’t repay the require amounts monthly, you can quickly find yourself in a world of pain.  Buy now, pay later schemes are also considered a liability and will reduce your borrowing capacity.

5.       Cut back on all types of spending.  To give yourself some margin during this time of year, it is prudent to only spend what you really have to in the lead up to and over the holiday period.  That way, if something unexpected comes up that you want to do, you have a bit of a reserve instead of getting into unnecessary debt.  Once you’ve formed some good habits, keep up the good work as you enter the new year to set yourself up to achieve your financial goals in the year ahead.

The festive season is a mix of excitement and stress for many people.  Setting firm spending limits on gifts and entertainment for the holidays can put you in a much healthier financial position come January. 

Remember to plan ahead to give yourself the best chance of success but most importantly, enjoy this special time of year with those you love.