Money

Money for Christmas

Paul Clitheroe.
Paul Clitheroe.

WE certainly live in interesting times.

The run up to Christmas is traditionally a period of big spending - and in some cases, overspending. But recent research shows that this year, many Australians are putting saving or debt reduction ahead of festive season spending.

According to ING DIRECT's latest Household Financial Wellbeing Index, 28% of Australians are planning to loosen their purse strings in the lead up to Christmas.

But here's the interesting thing. The same proportion of households (28%) say they'd prefer to knuckle down and pay off debt rather than go to town with Christmas spending. And a further 37% say they want to get debt under control before they kick start household spending

Does it mean we should all expect an empty space under the tree on Christmas morning? I doubt it. I suspect that over the weeks ahead, many of us will get into the Christmas spirit and relax household budgets for a while at least That's not entirely a bad thing - after all life is meant to be enjoyed. But the key is to take a controlled approach.

Getting in early with your Christmas shopping for instance, lets you take advantage of lay-by - and there's still time.

Some stores may charge a small fee for this but the beauty of lay-by is that you can pay off purchases at a pace that suits your budget. You won't face any of the high interest charges associated with credit card debt, and the goods can be held in-store until close to Christmas Day. It's an option that ticks a lot of boxes when it comes to keeping debt under control.

In terms of meeting savings goals, it's worth casting your net wide to take advantage of lower prices.

Shopping online is an easy way to compare prices and save but it pays to make sure you're dealing with a reputable site. Always allow for freight charges or foreign exchange differences if you're buying from an offshore retailer.

If you're committed to keeping a rein on spending over the holiday season, a sensible step is to draft a Christmas budget. And no friend or relative worth their salt is going to care if the price of the gift you gave is modest.

Where possible, stick to your normal financial regime over the coming festive season. Pay a bit extra off debts including your home loan and credit card, and tuck any spare cash into a high interest savings account.

Christmas is a big deal - and a terrific time of year. But the golden rule is that you don't have to put your finances through the wringer to have fun.

For more on smart ways to buy, and tips on paying off debt sooner, take a look at my book Making Money.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

Topics:  christmas clitheroe saving shopping



Scrawls and spit win top portrait prize

PORTRAIT OF GRANDMOTHER: Winning photographer Justine Varga and 2017 judge Dr Shaune Lakin with overall prizewinning portrait, Maternal Line.

Global controversy over top Tweed portrait winner

'I had no idea there was a knife at first'

INVASION VICTIMS: Sean English with wife Carolyn and sons Jake and Luke at their home in Salt where they were the victims of a frightening armed invasion on Monday.

Armed invasion scares Kingscliff family

Surfers farewell Joe the Loveable Larrikin

Joe Larkin sponsored Andy Mac in 1970 with $25 a week to surf and a free supply of boards like this one shaped by Brian "Furry "Austin.

Remembering surfing's pioneering days after Joe Larkin's passing

Local Partners

The Bachelor contestant defends topless performer past

IT’S been a whirlwind week for The Bachelor contestant Leah Costa, who’s been forced to defend her past as a topless entertainer after near-nude photos emerged.

REVIEW: Bigger 10.5 inch iPad Pro packs power, fun

Apple's latest iPad Pro offers plenty of creativity for both work and play.

ProMotion technology provides for super smooth scrolling

Elon Musk using anti-phone device at Splendour?

FILE - In this April 30, 2015, file photo, Tesla Motors CEO Elon Musk unveils the company's newest products, in Hawthorne, Calif. Tesla Motors is starting to build its electric cars with all the sensors, cameras and other gear needed to drive completely on their own when regulations allow the technology to take over that responsibility. The announcement made late Wednesday, Oct. 19, 2016, by Tesla CEO Musk marks the Silicon Valley automaker's next step toward selling cars that can navigate the roads without the help of a human. (AP Photo/Ringo H.W. Chiu, File)

Did Musk use high-tech to protect his privacy at the festival?

Cartoonist Mitch Cairns wins Archibald Prize

A portrait of Agatha Gothe-Snape has won the 2017 Archibald Prize for cartoonist Mitch Cairns.

Portrait of partner capture renowned art accolade.

Princess Diana: How an Aussie's story made her cry

‘A tear rolled down her cheek’ ... Phil Williams tells his story to Princess Diana.

Phil Williams met Princess Diana on his 18th birthday.

Jonathan LaPaglia takes you inside Australian Survivor s2

Jonathan LaPaglia in a scene from season two of Australian Survivor.

Strategy plays key role as castaways seek to make savvy moves.

Bachelor Recap: Matty’s stunning public rejection

Chic.

Last night we saw humiliation at its best

Rocky v Bris: How far you can stretch your property dollars

A unit in the waterfront Southbank Apartments in Rockhampton is on the market for $375,000.

What your money will get you in the Beef Cap v the capital city:

Hearty food for cold nights

Boneless lamb shoulder roast with crushed kipflers.

RECIPES: Two tasty lamb dishes to try this winter

How one man made more than $20m in a land deal

Varsity Lakes

Sale, with GST added, shows as a $26.4 million transaction

Oasis in Oxley Cove estate

14 Midship Court, Banora Point

Check out this week's feature property.