Avoid going overboard this Christmas: 10 tips to control your holiday spending.
With Christmas fast approaching, there’s so much to look forward to – time off work, getting together with loved ones, taking a holiday and the joy of unwrapping presents. But one thing none of us enjoy is the financial hangover that seems to follow all that festive good cheer.
From buying up big on gifts to booking expensive family holidays, it’s easy to go overboard around Christmas and leave a big dent in your bank balance. Here’s a selection of useful tips to help you manage your holiday spending so that you don’t welcome in the new year with a massive credit card bill weighing on your shoulders.
How much do Australians spend at Christmas?
According to research by finder.com.au, Australians planned to spend almost $10 billion on Christmas presents in 2016 alone. That's a lot of money! The results showed that on average, Australians planned to spend $539, a substantial rise from $419 in 2015. NSW shoppers were expected to lead the charge and spend $607 each, followed by West Australians spending on average $575.
The research also examined how people pay for their Christmas presents:
- 10 tips to control your holiday spending -
Make a budget and stick to it
Making a budget sounds so boring it almost seems against the spirit of Christmas, but sitting down to crunch the numbers will help you in the long run. Consider how much cash you have to spare on gifts for friends and family. If you’re planning to use a credit card, work out how long it will take you to pay off the amount you want to spend. As well as an overall budget, plan how much you will spend on each person. Once you know how much money you’ve got to play with, you can start looking for suitable gift ideas.
Make a list (and check it twice)
Having a plan before you hit the shops can help you keep more money in your pocket, especially if you’re an impulse buyer. Put together a list of everything you want to buy your loved ones and yourself, and stick to it regardless of the temptation you might encounter. It’s easy to be sucked in by special deals at this time of year and the fear of missing out is a powerful motivator, but try to stick to your guns and only buy the items on your list.
Research your purchases
When you know what you want to get, you can start researching all your purchases online. Which stores offer the best deals on the items you want? Can you save money by buying online instead of in-store? You might also be able to find discount coupons and promo codes to slash a few extra dollars off the bill.
Use the right credit card
Keep an eye out for special offers from banks and credit card providers to help cover the cost of your Christmas spending. If you are using a credit card, take advantage of interest-free days to help pay off your debt. You can also use your holiday spending to help build a balance of rewards points, plus enjoy the added peace of mind provided by price protection coverage.
You can also keep an eye out for the benefits provided by cash back credit cards. These cards usually offer either a percentage of your total spend as cash back at the end of each month, or a one-off cash back payment as part of a special promotion to entice new customers.
Look for cash back offers
Some banks also offer incentives to new customers that can help maximise your Christmas budget. For example, when you open a new ING Orange Everyday transaction account and deposit at least $1000 and make 5+ card purchases within the first month of opening, you'll get a $75 cash bonus directly into your account (limited to the first 10,000 applicants. T&Cs apply). This offer is only available until 31 May 2018. You can see more information on this cashback offer and open an account here. Also, if you have a debit Mastercard, you can take advantage of numerous offers and discounted products through the Mastercard Debit Rewards program.
Avoid online tricks
Most people are aware of some of the tricks bricks-and-mortar stores use to entice us to spend more, but are you savvy with the sneaky tactics online merchants use to encourage you to run up a bigger bill?
Perhaps the most common trick is the minimum-dollar limit if you want to access free shipping, prompting you to spend more than you originally planned just to save a few bucks on the price of delivery. To get around this, plan a big shop in advance so you can get free shipping without making impulse purchases, or keep an eye out for discount coupons offering free shipping.
There are plenty of other ways online retailers encourage you to spend, including:
- Saving your address and credit card details so you can make one-click purchases
- Sending emails and newsletters with special offers and promo codes
- Recommending complementary products that might go with something already in your cart
- Targeting you with ads of products you’ve recently browsed
- Offering free returns
The way to resist the pull of these tricks is simply to use common sense. Unsubscribe from newsletters, delete your details from the retailer’s payment system, stick to your budget, don’t make impulse purchases, and familiarise yourself with a store’s returns process before you buy.
Sign up for mobile banking alerts
Many Australian banks offer an alert service if your account balance dips below a specified level. Signing up for this service can help ensure that your bank account stays in reasonable shape during the holiday period. Once you’ve registered, you’ll receive a text message letting you know your balance is getting low, reminding you it’s time to end your shopping spree.
Look for a bank account that helps you manage your budget
You can also opt for a bank account that helps you manage your spending and bill payments, such as the AMP Bett3r Account bundle. The AMP Bett3r Pay account works as an everyday transaction account, however it also sets money aside for bills and other regular payments, so you don't have to worry about not having enough funds to cover your upcoming bills.
Beware of overdraft fees
Check with your bank to find out the terms and conditions surrounding account overdrafts. If you use your debit card to make a purchase which pushes your balance below zero, you could be slugged with a hefty fee. If possible, change your account so that purchases that take your balance into the negative will not be approved by your bank.
Always remember the importance of planning ahead. When it comes to Christmas lunch or dinner or entertaining on Boxing Day, stock up on any non-perishable items well in advance to take advantage of specials. If you’re travelling, book several months ahead of time to find the best travel deals. Even filling up on petrol as far out from Christmas as possible can save you money.
Finally, remember to relax and enjoy yourself, safe in the knowledge that you won’t be waking up with a debt hangover in the new year.
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*The deals and offers in this article were correct at the time of publication and may have changed or expired. Always check with the provider for current deal conditions.