Christmas cheer: Keep festive without dipping into your savings account

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If the impending expense of Christmas has caught you by surprise, use our strategies to get through the festive season without maxing out your credit card or plundering your savings account. By Jackie Pearson.

November 16, 2009

I won't tell you how many pay days are left until Christmas – rest assured, there are never enough! If you're like me and can't believe the shops are already decorating and stocking their shelves then you need to enamour yourself with some tactics for getting through the festivities, food and gift giving without breaking your budget

Step one: Set a budget
Yes, it's boring, but it works. Figure out how many people you have to buy for and set a limit of how much you can realistically spend on each person.

Start by writing a list of all the people you give to. Don't forget to include the kids' teachers and colleagues. Are there any people you can trim off your gift list? If you have pages of names perhaps it's time to hold a family meeting to consider changing the way you exchange gifts such as a “one big gift” rule or “Christmas Cringle”.

Step two: Go bargain hunting
Make the most of sales. This does take a bit of prior planning. Toy sales, for example, seem to happen mid-year.

Start paying attention to all those catalogues that come through the letter box to keep track of what's on sale and compare prices. Consider using sites like ebay to find quality second-hand gifts.

Step three: Use lay-by
It's old fashioned and some retailers no longer offer lay-by but it is one way to avoid using credit and still manage to get what you want. Most lay-by agreements are for six weeks, so you still have plenty of time to pay things off between now and Christmas.

You are usually required to leave a 10 percent deposit and make regular payments, and if you don't pay the whole price within the agreement period the goods can be returned to the store and you can lose any payments you have made so you have to be certain you can meet your obligations under the agreement.

Step four: Pool your resources
If you know there is something your parents would really like or need for Christmas for example, consider sharing the expense of the gift with your siblings.

Step five: Don't get caught out again
The best time to start planning for Christmas is January when everyone else is at the beach. Consider opening a special purpose savings account that's dedicated to Christmas. Some credit unions still offer Christmas Club accounts. Remember to compare interest rates and fees before opening any new account.

Hit the post-Christmas sales to buy next year's cards, gift wrap, decorations and gifts with a summer feel, that way in November, you can start to enjoy the festivities without the retail frenzy.

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