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The festive season beckons, with end-of-year parties and gift giving characterising the last month of the year. While it may be tempting to blow off some steam by letting loose in the shops, it could pay in the long run to formulate a loose spending plan.

Consider devising a concrete plan of attack before hitting the shops. It’s fun to kick up your heels at this time of the year, but it’s also important not to party yourself into poverty and start the New Year on a financial back foot.

Avoiding overspending can be prudent if you’re feeling financially stretched, but it doesn’t necessarily mean having less fun. Below are some smart spending Christmas tips:

  • Pace yourself – Know your incomings and outgoings, and what’s left over to dedicate to the party period.
  • Stick to a budget when buying gifts – Set a budget and know where your account balance should be at the end of each week. A budget tracking app may give you extra motivation to stay on track, while comparison shopping is an effective way to manage expenses.
  • Start shopping early – It’s never too early to start thinking about Christmas gifts. Familiarise yourself with the cut-off dates for online shopping deliveries. The closer it gets to Christmas, the more likely you are to ‘panic buy’ and break your budget.
  • Alternatively, hold off gift giving until the New Year – Capitalise on the post-Christmas sales to buy gifts.
  • Prioritise your spending – Make a list of events that you’ve been invited to attend, work out what they’ll cost you and then cross off those that aren’t as important to you. Don’t succumb to last minute party pressure, as unplanned nights can cost you financially.
  • Apply the ‘needs’ versus ‘wants’ rule – For example, do you really need to professionally blow dry your hair? Or can you compromise by learning to style it yourself?


Tips to avoid a financial Christmas hangover

Buying on credit isn’t necessarily always bad – you just need to ensure you view it as a short-term loan that you can pay back during the interest-free period.

The real problem occurs when people get stuck in a roundabout of not paying their debt in full. Anyone struggling with credit card debt at Christmas, or any time of the year, should address the issue as soon as possible.

Consolidating debts through a personal loan can remove you from the interest payment roundabout. Once you’re in a position to start saving, consider making automated deposits into a high-interest savings account or term deposit to keep you on track.


This article was provided by ME Bank, a bank 100% owned by industry super funds, including Vision Super.
Members Equity Bank Limited ABN 56 070 887 679 Australian Credit Licence 229500.

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