How to Stay Out of Debt This Holiday Season
The holiday season is just around the corner and we’re already counting down to Christmas lunch and cricket in the backyard. It’s also a time of year that can get a little bit stressful when it comes to your finances. More than 1 in 4 Aussies will still be paying off their Christmas credit card debt in 12 months. Last year, Australians racked up a staggering collective credit card debt of almost $30 billion.
How do you not go overboard and end up with a holiday debt hangover? Here are a few of our top tips to help you spend smart this season and preserve your credit score into 2020.
Start shopping early
Whatever you do, don’t leave your shopping until the last minute. Doing so will almost ensure you go over budget since there’s less selection and you won’t have enough time to find a good deal. Stores are also one step ahead and have less incentive to put things on sale in the final hours before Christmas. So get prepared and hit the shops early.
Know what you want to buy
The key to avoid overspending is being prepared. Grab a cup of tea and put together a list of who you need to buy for with gift ideas and a rough idea of cost. Once you know what you need to get you can start keeping an eye out for deals and stay focused while you shop.
Set spending limits
If you haven’t already, figure out how much you can afford to spend on the holidays. You’ll want to factor in food and alcohol costs, gifts, fun décor for the house and anything else that you need to buy. If you’re worried about sticking to your budget, take out what you can spend in cash or use a prepaid credit card for that amount. Once it runs out, you’re done.
Take advantage of online deals
Black Friday doesn’t have the same hype in Australia as it does in the United States, but there are certainly still deals to be found. Black Friday falls on November 29th this year and it's followed by Cyber Monday on December 2nd. So get out that list of yours and see if you can find any good deals.
Consider DIY gifts
You know what they say, it’s the thought that counts. You don’t have to break the bank to make someone happy. A photo album or homemade candles are a few examples of meaningful DIY gifts. A classic ‘coupon book’ with “one free massage” or “one breakfast in bed” is another fun gift idea for your significant other. The same concept can also work for other people in your life. You could always offer to babysit your best friends kids on Friday night, or give your child one pass to stay up an hour later.
Be realistic about your financial situation
Before you do any shopping, you should review your current financial standing and see how your credit score is looking. Are you in good shape or do you need to be a little strict with yourself? You can check it for free here. You’ll be able to see it change over time and understand what impacts its movements. Then give it another check in the new year to assess how you did and how you can set yourself up for success in 2020.
Now have a great holiday season!