Cheer today, debt tomorrow

The traditional Christmas carol starts
‘Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse,
The stockings were hung by the chimney with care,
In hopes that St Nicholas soon would be there.

Nowadays the carol could be rewritten
‘Twas the week before Christmas, the cash registers ring
Shop till you drop, don’t miss a thing,
Buying up big, it’s not very hard
If you don’t have the cash, just pull out the card.

From early November retailers have been telling us what we can’t live without and what our kids must have if they are to still love us on Christmas Day. It’s easy to get caught up in the momentum. Of course, the downside is you end up with the post-Christmas blues when the credit card statements arrive. This may mean that wealth plans get scrapped because you have to pay off the debt first.

How can you manage the Christmas challenge?

Obviously the best strategy is to plan ahead and spend only what you can afford. If you have the discipline to do this, congratulations, however there are not many people who can successfully control their Christmas spending.

So how about some lateral thinking like these ideas?

• Sell things you don’t need in a garage sale or online to fund your Christmas fun. Start with the expensive toys your kids have grown out of to make space for the new. They could make perfect Christmas gifts for someone else’s children. And don’t forget all the things you’ve bought impulsively in the past year – did that new gym equipment really live up to expectations?

• Buy a few quality presents for children rather than buying many cheaper items. This also helps the environment with less rubbish going to landfill.

• Give an “experience” as a gift, particularly for older relatives who don’t need more “things”. How about arranging a family reunion, taking them on a nostalgic tour of their old haunts or to your local theatre?

If your best intentions fail and you end up with a large Christmas debt, a repayment plan is essential before the interest bill starts adding up. This may mean committing a portion of your income to reducing the debt, working overtime or getting an extra job.

And what about next year?

If you put a $2 coin in a tamper-proof container every single day you would have over $700 to fund next year’s celebrations. It’s certainly not rocket science and with a tiny amount of commitment, you could start next year with a clean debt slate. Won’t that make next Christmas more enjoyable?        

The information provided in this article is general in nature only and does not constitute personal financial advice.