Unless you have managed to avoid shopping centres, television, catalogues, and radio then it’s likely you are well aware that the Christmas sales are upon us. Decorations in store, sales have begun, and plans for socializing are in full swing. No one can deny it, Christmas brings with it the promise of plenty of joy. Despite the promise of joy, it also brings stress, concern, and worries for lots of families every year. More often than not the end of the holiday season brings its very own gift - the gift of debt. While your credit card statement might be looking okay right now it can literally take one or two visits to the shopping centre during the Christmas rush and you could see yourself unable to pay it off during the interest-free period and then battling to make payments during the New Year. Don’t make life harder for yourself financially, put some of our simple tips to use and start the year debt free and relaxed.

Here Are Tips on How To Avoid Debt at Christmas Time

1.Lay-by

Lay-by is a great alternative to credit cards because it means you can secure your purchase in advance and not have to pay for some weeks. So, you can still take advantage of great sales but you don’t have to pay for the item up front. It also means that if you have prying eyes in your house, you don’t have to find a hiding place for presents. Lay-bys are often for around a six-week period, and require a deposit and regular payments. Although they will sometimes have a fee associated, it is generally minimal and nothing compared to the amount of interest you will pay on a credit card.

2.Don’t Leave It Until Last Minute 

Last minute Christmas shopping will always bring with it stress, anxiety and the feeling of pending doom. Everyone around you is in a mad rush, options are low, the things you are after are sold out and you are frazzled and worried. Don’t do it to yourself! Plan ahead, get to the shops early and commit to yourself that you won’t be visiting big shopping centres in the week leading up to Christmas. In the panic and rush, you are bound to pay too much for things you will be able to shop around for if you plan.

3. Have an Open Conversation

Is there a friend or family member who you have always exchanged gifts with, but it has recently become more of a token effort? Could you have a conversation with that person and decide to do something other than buying a gift? Maybe you could commit to an afternoon together, a coffee date or a walk- something that won’t cost money but will be just as meaningful. You will probably find that your friend feels just as good about the decision.

4. Don’t Get Caught Up in The Hype

When hype surrounds things, people tend to spend more than they would normally. If you have ever had your sights set on a home during an auction or taken part an eBay bidding war, you will know that you are likely to spend more when the excitement and stress levels rise. Decorations, music, festivities, and crowds- while we might enjoy some parts of these, they all add to the Christmas hype. Try to avoid it as best you can, because much of it is aimed at making you spend money you don’t need to. Advertising does a great job of convincing you that you need something you don’t, especially when it has the Christmas hype to help!

5. Try Not to Use Your Credit Card

If you can afford to pay cash, just pay in cash, and don't use your credit card to avoid surprises when your January bills come. Being in a cashless society makes it so easy for us to just input our credit card details online or swipe it out. But if you don't have a budget for the expenses, it can go out of control, and you will end up with debt. 

6. Budget for Next Year’s Christmas Fund

If you’re capable of setting a budget for your groceries (which, of course, you are!), then you’re more than capable of setting up a budget for Christmas, next year. Firstly, review how much you spent on Christmas this year, consider where you wasted money, and calculate how much you would have saved if you didn’t have the waste. Now that you’ve crunched those numbers, you have a good idea of how much you should budget for next year’s Christmas. Next, sign up for a bank account with a bank that you aren’t currently with, and put away X amount every pay cycle until that next Christmas. For example, say Christmas this year costed you $1000 – divide that by 52 weeks, put away that $20 a week and don’t touch it until November. This way, you’ve eased the financial burden of Christmas sneaking up on you, meaning you won’t have to rack up a debt on your credit card, and you can even take advantage of sales throughout the year to buy gifts at an awesome price (i.e. doing your Christmas shopping at the end of financial year). 

Planning ahead and getting thriftier this Christmas season doesn't mean you won't have a great holiday. It is possible for you to have a happy holiday season, including a Merry Christmas and a happy, debt-free New Year if you make a plan and commit to it. If you are already in debt and you need help, just call us on 1300 003 328 or leave us a message via enquiry@creditcounsellors.com.au.