Australia is often known as the lucky country. We owe much of our enviable lifestyle to our geographic location in the southern hemisphere. This position also leads to our annual summer vacation coinciding with the celebration of Christmas or Hanukkah, concentrating two big variable expenses in a six week period. It’s no wonder many Australians return to work after Australia day with a credit card hangover.
According to credit bureau Experian, more than half of Aussies put up to $4,000 on their credit card to pay for their holiday. Bloomberg reports that Australians spent a record-breaking $74.5 billion in the run-up to Christmas in 2022.
Here are my top 7 tips to prepare for the holiday period and avoid the New Year debt hangover:
1. Start planning early
Like most lumpy bills, the secret to managing holiday spending is to prepare for it over the year. It’s not like it’s a surprise that when it turns up in December. Work out a budget and set aside some from each pay through the year.
2. Do your research
A number of the big stores have huge toy sales several months before Christmas. Find out when they will be, and get shopping early. Take advantage of lay-by to avoid having to hide presents from the kids for 5 months.
3. Make lists
Plan who you will be shopping for, and how much you will be spending on each person. Keep track of what you’ve spent. It’s very easy to forget what you’ve already purchased, and end up buying more than you’d planned.
4. Avoid comparison
Life is too short to live someone else’s life or Christmas tradition. Seeking to live the Instagram version of Christmas can become very expensive. Know what you truly want and live it.
5. Avoid a last minute rush
When it comes to gifting, last minute panic shopping is the enemy. Start by making a list. Note everyone you will buy a gift for, and assign each a dollar amount. Buy at your leisure taking advantage of Black Friday and other sales along the way.
6. Single Parents – remember it’s not a competition
Whether it’s a sense of guilt or a desire to out-gift the ex, many divorced parents compete to see who can give the children the best and most popular presents. Attempting to one-up your ex is conveying the wrong message to your children and will quickly put your finances in the red.
It is important for children to understand the value of money and there's no greater value than time spent together building memories and honouring traditions they will cherish for a lifetime.
7. Beware self gifting
It can be tempting to pick up a few things for yourself when gift shopping. The allure of self-gifting can be powerful. Avoid it by focusing on the task at hand. Remember this is the season to give, not to receive, especially from yourself. If you know you’ll be tempted, plan ahead and put yourself on your Christmas list.
Remember that what truly matters to your friends and family are not the things you buy them, but the fact that you care enough to spend this occasion with them - and that’s something we can all afford.
Know yourself, your tendencies and potential downfalls. If you have a blowout this year, remember there’s always next year. But winter is a great time to plan and start taking action to avoid the post summer money blues.
Founder and Chief Sherpa
With over 35 years in Financial Services from consulting to management, Vince Scully is the go-to guy for wealth management and financial advice. Vince founded the Calliva Group; a fund manager, product issuer, advisor and lender to Government and private clients. Vince is an advisor to the Wealth Management Industry, and prior to his role as CEO at Calliva, a senior member of Macquarie bank’s infrastructure team.