Money

Money for Christmas

Paul Clitheroe.
Paul Clitheroe.

WE certainly live in interesting times.

The run up to Christmas is traditionally a period of big spending - and in some cases, overspending. But recent research shows that this year, many Australians are putting saving or debt reduction ahead of festive season spending.

According to ING DIRECT's latest Household Financial Wellbeing Index, 28% of Australians are planning to loosen their purse strings in the lead up to Christmas.

But here's the interesting thing. The same proportion of households (28%) say they'd prefer to knuckle down and pay off debt rather than go to town with Christmas spending. And a further 37% say they want to get debt under control before they kick start household spending

Does it mean we should all expect an empty space under the tree on Christmas morning? I doubt it. I suspect that over the weeks ahead, many of us will get into the Christmas spirit and relax household budgets for a while at least That's not entirely a bad thing - after all life is meant to be enjoyed. But the key is to take a controlled approach.

Getting in early with your Christmas shopping for instance, lets you take advantage of lay-by - and there's still time.

Some stores may charge a small fee for this but the beauty of lay-by is that you can pay off purchases at a pace that suits your budget. You won't face any of the high interest charges associated with credit card debt, and the goods can be held in-store until close to Christmas Day. It's an option that ticks a lot of boxes when it comes to keeping debt under control.

In terms of meeting savings goals, it's worth casting your net wide to take advantage of lower prices.

Shopping online is an easy way to compare prices and save but it pays to make sure you're dealing with a reputable site. Always allow for freight charges or foreign exchange differences if you're buying from an offshore retailer.

If you're committed to keeping a rein on spending over the holiday season, a sensible step is to draft a Christmas budget. And no friend or relative worth their salt is going to care if the price of the gift you gave is modest.

Where possible, stick to your normal financial regime over the coming festive season. Pay a bit extra off debts including your home loan and credit card, and tuck any spare cash into a high interest savings account.

Christmas is a big deal - and a terrific time of year. But the golden rule is that you don't have to put your finances through the wringer to have fun.

For more on smart ways to buy, and tips on paying off debt sooner, take a look at my book Making Money.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

Topics:  christmas clitheroe saving shopping


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Grow your own dwarf citrus trees

There's a new meyer lemon called Lemonicious that produces lots of tangy, juicy fruit, has glossy green leaves and also beautifully-perfumed white flowers in spring. Plus it grows to a very manageable 1m when planted in a pot.

Tips and picks from gardening expert Angie Thomas

OPINION: Pros, cons of once-sacred super fund

Can QSuper be recommended as a super fund? The answer is sometimes yes and sometimes definitely no.

Financial advisor Christoph Schnelle reviews QSuper

LIVE BLOG: Two debutants in Blues team for Origin I

Jarryd Hayne will return to the NSW side.

Local Partners

Concert death toll revised up to 22, tour suspended

TWENTY-TWO people have been killed and at least 59 people have been injured following a terror attack in Manchester

Nattali Rize at the top of the charts

ARTIST: Australian reggae artist Nattali Rize has Native American and Samoan roots and lives between Byron Bay, Cairns and Jamaica.

Her debut album hit the top at the Global Reggae Charts

Casual Keanu says fame is ‘cool’

Keanu Reeves in a scene from the movie John Wick: Chapter 2.

NOBODY expected much of John Wick when it was released in 2014.

Ariana Grande breaks her silence after fatal blast

According to reports quoting witnesses, a mass emergency evacuation was prompted after explosions were heard at the end of US singer Ariana Grande's concert in the arena.

The entertainment industry is in shock after attack on concert

Pitch Perfect star suing Woman’s Day over ‘liar’ articles

Actor Rebel Wilson outside court on Friday.

REBEL Wilson's career destroyed by grubby campaign, court hears.

Seven Year Switch: The boner to end all boners

Johnny’s outraged over claims he has a cracked boner.

She gulps. Her face says it all.

Bay to star in Hollywood shark thriller ‘Cage Dive’

Cage Dive, written and directed by Gerald Rascionato, is now screening in the United States of America. It had scenes filmed in Hervey Bay.

And our visiting humpback whales also make appearance.

One of Maryborough's most historic homes is still for sale

FULL OF HISTORY: Trisha Moulds is owner of the historic Tinana state known as Rosehill. The beautiful home is currently for sale.

It has been the scene of both joy and tragedies over the years.

The face of the Sunshine Coast's overpriced rental crisis

Alyx Wilson had to rent a $385 unit in Currimundi because the market was too competitive for cheaper rental housing. She is now renting a room from friends who own a house in Currimundi, and says its much more affordable.

Young people feel the strain in competitive, expensive rental market

WATCH: Take a tour of a tradie's dream home

5a Bruce Hiskens Court, Norman Gardens, going for $720,000. INSET: Lea Taylor.

Huge block with potential for anything

REVEALED: Where it's cheaper to pay off a mortgage than rent

6/190 Ewing Rd, Woodridge, is listed for offers $215,000. Picture: realestate.com.au

Brisbane suburbs where it is cheaper to buy than rent

The hardest place in the state to find a rental property

RENTAL SHORTAGE: Richmond River, Ballina Bar Emigrant Creek Pacific Highway Teven Interchange. Photo Jay Cronan / The Northern Star

Not enough supply to meet insatiable demand

Ready to SELL your property?

Post Your Ad Here!