ChristmasWell the festive season is in full swing – this means parties, gifts, eggnog, mistletoe, Santa and normally family feuds. But the thing causing the most stress at Christmas, is the level of credit card debt people put themselves in, which hangs over their heads for many months to come.

Australians spent over $47 billion in the Christmas spending period between November 15th and December 24 (2015 statistics) according to Inside Retail.

The majority of Christmas spending gets put on consumer credit cards as the days of a cash society are long gone – but this is exactly the problem. By handing over the plastic fantastic, you easily lose sight of what has been charged to the card until you get the credit card bill at the end of the month.

According to ASIC, the average credit card bill in Australia is close to $5k – and if you only make the minimum repayments, it will take nearly 30 years to pay it off in full – plus it will cost you around $14,900 in interest.

So how do you survive Christmas shopping without maxing out your credit cards, and getting into debt that you can’t afford to pay off?

1.     Make a list. Not the naughty or nice type for Santa, but a list of who you need to buy presents for, what food or supplies you need, and any other incidentals – like decorations and wrapping. To really break it down, we suggest one list for gifts, and one for food & incidentals. Stick them on the wall (away from prying eyes). When you go shopping, the list MUST go with you. Stores pay a lot of money to get their advertising right in your face at the register and suck you into buying things you don’t need – so get what is on the list and leave.

2.     Put a budget next to each item on the list. I know I know – from an accountant this is kind of an obvious tip, but you need to know your limits. For example, I put a limit on presents for my nieces and nephews of $25 each. I have 10 nieces and nephews so spending hundreds on each child is simply not an option. Remember, Christmas is about spending time with loved ones, not the value of the presents you purchase. By putting a budget value next to each item, you can quickly move past everything out of your price range, and not get swept up in the hype of Christmas and splurge on things causing debt stress later on.

3.     Start early. I normally have my Christmas shopping finished by 30th November every single year (if not earlier). The closer we get to Christmas, the more stressed we get as individuals and we make rash purchase decisions as we feel we simply must have things “just in case”.  Most times these purchases are not needed, and are therefore a waste of money.

4.     Stock up during the year. I know it seems weird buying Christmas supplies earlier than November, but especially for food items (non perishable of course), buying a few extra things each time you do your groceries is much less of a financial strain than buying everything in one massive grocery shop on the 23rd December. Things like napkins, bon bons, lollies, nuts, snacks, gravy and sauces can all be purchased earlier and set aside in your cupboard in a separate location (so you don’t use them prior to your Christmas functions). This will also mean you don’t run the risk of missing out as a lot of Christmas supplies such as Turkey and decorations sell out in the final weeks before Christmas as stores do not restock.

5.     Take cash. Yes, I buck the trend, and based on my lists and budget requirements, I go to the bank and withdraw my set limit in cash. I then make my Christmas purchases, within my allocated budget, pay in cash and nothing hits my credit card. By having a set amount in my wallet, and not going back to the ATM, I know I am spending within my limits and I won’t be subject to Credit Card debt resulting in the post Christmas blues.

6.     Think outside the box when making purchases. I am known as a bit of a thrifty shopper and I frequent discount stores for supplies and kids stocking stuffers, larger department stores when they have sales, factory outlets and local handmade businesses in order to get great presents for my tight budget. I don’t walk around the shops aimlessly (as this leads to purchases not on the list), I know exactly what I am buying, where I am buying it from and I hit those shops like a contestant on the Amazing Race.

“Christmas should be a time of celebration and joy with family and loved ones. Christmas should not cause stress, debt or worry about how you will survive. So be prepared, start early and take those lists and Christmas debt will be a thing of the past.”

Whilst everyone else is running around like headless chickens in the weeks leading up to Christmas, I will be at the beach, relaxing in the nice weather (well hopefully if Melbourne’s weather actually improves), knowing my presents are already wrapped and under the tree.

And come January, I won’t be spending my entire monthly salary paying off purchases I couldn’t afford to buy. So ask yourself, will you be having a Merry Christmas?