With Christmas just around the corner, you’re probably preparing to switch your spending into high gear. It’s a time of joy and celebration but the Silly Season doesn’t have to mean we stop saving for a first home deposit or fall behind with mortgage repayments.
Here are some tips to spread Christmas cheer without blowing your budget and derailing your financial goals:
Create a budget
‘Tis the Season for budgeting. Ease your stress by deciding how much money you can afford to spend over Christmas and allocate a portion to all your expenses for the holiday period. Christmas presents are an obvious expense but it’s the extra costs of Christmas that can blindside you. When you’re working out your budget, remember to factor in the cost of attending Christmas events, catering expenses if you’re hosting, and incidentals if you’re travelling. Try our budget calculator.
Have a contingency plan
An unexpected expense, like a car breakdown, can send your finances into a tailspin. Always keep a bit of spare cash on hand so that you’re prepared if you do come across a rocky patch.
Meet your big-ticket expenses first
Skipping mortgage payments is not a good idea – it can result in extra fees and more interest accruing on your loan. Likewise, if your car registration or insurance renewal is due, get on top of them before you budget for anything else so they don’t come back to haunt you during your break.
Use cash… or know your credit card terms
If you are planning to use your credit card to get you through the festive season, make sure you are familiar with the terms. How long is the interest-free or honeymoon period? What are the interest rates? Using credit cards may be convenient, but the interest can make for an expensive Christmas and set you up for financial stress into the new year.
Use buy now, pay later schemes wisely
Many physical and online stores allow you to purchase with Afterpay and zipPay so you can spread out your payments. Paying in installments certainly has some benefits but it can be tempting to shop up a storm and spend more than you intended. A report by ASIC has found Australian shoppers have racked up more than $900 million in debt through buy now, pay later schemes.
Consider a Staycation
With travel, accommodation and eating out, celebrating Christmas away from home can very quickly tip you into financial stress. Why not holiday in your own home and make the most of what your local area has to offer?
Plan for next Christmas
Next Christmas is the last thing you’ll be thinking about, but once this Christmas is done and dusted you should plan ahead for next year. Start saving now, shop the sales throughout the year, and consider talking to a mortgage broker about whether refinancing your home loan might put more money in your pocket throughout the year.
Remember, Christmas is a time to come together and celebrate with family and friends. Don’t get so caught up with the pressure to buy gifts that you forget to enjoy the people you’re doing all this for. Budgeting and planning ahead will do wonders for your stress levels this festive season.
If you are feeling financially flummoxed by the Festive Season, or your budget has taken a battering during the end-of-year sales, don’t wait to right your finances. Get some help! Give Vision Property & Finance a call on 02 8354 3000 to reach Sydney’s office or 02 4014 1999 to talk to someone in Newcastle’s office. Speak with one of our friendly Financial Advisors and they can help you set-up a plan for next year and your financial life beyond. You can also contact us here.
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