Drowning in Debt – Simple Budgeting Tips

Drowning in Debt – Simple Budgeting Tips

Drowning in debt? Now’s the time to devise a budget

Christmas is fast approaching and for many of us, it’s a time when budgeting goes out the window. However, with careful planning, good budgeting is achievable – and that means you won’t have to enter the new year with a huge financial hangover!

Where does the money go?

While many people spend thousands of dollars on Christmas gifts, food and alcohol, the average Australian shopper will spend about $1,232 this Christmas, (that’s $23.9 billion nationally), according to Finder. Gifts come in at the top for festive expenses, with Aussies expected to splurge $374 each on presents.

It’s a substantial amount of money – and while some can afford it – others choose to swipe their credit card and worry about paying it back later. This can be a costly mistake. In fact, Finder found that people paying for last year’s Christmas festivities on credit card pushed Australians $24.3 billion deeper into debt. This equated to $1748 per credit card, leading to months of hardship for those already struggling to make repayments.

How to save:

1. Stick to a budget and avoid credit card fees

According to David Mah Chut, director at Inline Partners, sticking to a budget and choosing to pay with cash or a debit card, as opposed to a credit card, can minimise financial worries over the festive season and beyond. “Credit card interest fees can exceed 20 per cent and if you can’t make repayments, Christmas may end up costing you far more than you realise,” he says.

2. Only buy what you can afford and shop around

It’s important to only spend what you can afford on gifts and shop around. Compare prices online before buying an item so you know you’re getting the best possible price. If you can hold out until after Christmas, Boxing Day sales are a great way to save money.

3. Ask family to share the costs

As for Christmas lunch, catering for extended family members can be pretty expensive, particularly when alcohol is in the mix. If you’re hosting, ask family members to bring a plate or a bottle of wine to help share the costs.

4. Plan for next year

Now that you remember how expensive Christmas can be, start planning for next year. Putting away just $20 per week can make a significant difference come December 2022. In fact, that would equate to $1040!

Do you need help getting out of debt and devising an achievable budget? Get in touch with us today

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