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David Koch shares his tips to avoid holiday debt
AS the calendar counts down to Christmas Day, knowing the numbers that matter can help save you money and a few holiday headaches.
Whether it’s the busiest shopping days, the deadline for online orders or checking your credit card interest rate, it pays to plan in December more than any other month.
Money experts say the most important numbers are those that make up your household budget. It’s the key document to get you through Christmas unscathed. Knowing what you spend, and what you can afford to spend in the weeks ahead, will prevent a nasty financial surprise later.
The Australian Retailers Association forecasts that Aussies will spend $46.7 billion in the Christmas trading period between November 15 and December 24, up 3.6 per cent on last year. More than $28 billion is tipped to be paid by plastic in December alone.
SMART SHOPPING ... Shorten your shopping excursions to save money. Picture: Andrew TauberSource:Supplied
Canstar research manager Mitchell Watson says the average credit card interest rate is 17 per cent, so if you overspend in the festive season by a couple of thousand dollars that’s more than $300 you’re handing over to the bank.
“There are a handful of cards with rates under 10 per cent, so if you have an ongoing debt, get a low rate.†Check what’s available on financial comparison websites.
Other cards can be more helpful at Christmas. Dig up any gift cards you have from last year or recent birthdays. Research by Canstar Blue found that 30 per cent of Australians have forgotten about a gift card until after it expired.
“Go through your wallet and use any gift cards you find to help fund your Christmas spending,†Watson says. If it recently expired, some stores may be lenient.
The busiest days for Christmas spending vary depending on who did the research, but December 1 is seen as a peak day for online shopping. If you’re buying presents online, aim to have it all completed by December 14 to allow enough time for delivery — although you can check the cut-offs with most retailers online.
READ our guide to credit cards
The busiest day at the stores is usually two Saturdays before Christmas, which means December 12 this year.
GIFT DEADLINE ... Online Christmas shopping should be sorted by December 14 to allow for delivery timesSource:Supplied
MyBudget founder Tammy May says shortening your shopping excursions can help. “Research tells us the longer we shop, the less rational we become and the more likely we are to make poor spending decisions,†she says. Always shop with a list.
If you can’t afford it, don’t get caught up in the modern trend of big spending on gifts. There’s a good chance your family members will also appreciate not having to spend so much, so have a family strategy in place by the end of the first week of December.
May says it’s good to get creative. “Remember that expensive gifts are often trumped by those with sentimental value,†she says.
Beyond Christmas, the Boxing Day sales offer bargains for people who plan. Only spend what you can afford, and if you have spare time on Christmas night you can often start shopping online early.