While it might be hard to believe, it can’t be denied that the silly season is once again almost upon us.
With Christmas just over four months away, and the new year not far behind, for the smart spender, now is the time to plan ahead.
Australians typically love to whip out the credit card to cover extra costs during the December-January period. The downside to this is that when credit card bills are due in February, as a nation, we end up paying tens of millions of dollars in extra interest to our banks.
While paying for everything up front in cash in one go may not seem like an option, breaking down costs from now can see you start the new year with a clear financial slate.
Here are RateCity’s top tips for planning a credit-free silly season:
Review and estimate
The first step in planning is to try and estimate how much you will be required to spend come the end of the year on festive occasions. This should factor in everything from Christmas presents, Christmas lunch and social outings for special events. It may help to look at your credit card statements from last year to see where the bulk of your money went.
When estimating spend for this year, see if you can downsize in any areas. For example, now that you have more time to look for Christmas gifts on sale, your total spend may be able to be reduced.
Once you have a good idea of how much you will be spending on each category, try and formulate a budget that you can stick to realistically using cash only.
Start present shopping early
While the thought of dragging Christmas present shopping out over several months may sound like the stuff of nightmares, keeping an eye on what sales are happening can save you a lot of money. If you know the sort of gifts you’re looking for, signing up to some newsletters to be notified when big sales are on will keep you in the loop.
For online shoppers, starting the search earlier on can mean you avoid paying excessive shipping fees to get the gift to you in time. The difference between express shipping an item and choosing the standard length of delivery can often be upwards of $10 so there are plenty of savings to be had for early birds.
Spread grocery costs
If you’ve been nominated to host Christmas lunch at your place, or are having relatives stay over for the festive season, your food and drink expenses will most likely rise through the roof come December. Spreading out the financial burden by adding one or two extra items to your grocery shop every week leading up to Christmas will cut the pressure to put it all on plastic at the last minute.
This strategy also allows you to take advantage of bulk buy specials for things such as soft drinks, biscuits and chips that can sit in the pantry until Christmas without a worry. Spreading out the cost of purchasing alcohol will also save you the later bulk expense of forking out for beer, wine and spirits when you may be running low on cash.