Chris McCormack/cm160019

Dealing with the Christmas financial hangover

WHETHER you are enjoying the holiday season on a Whitsunday Island, working at a coal mine or at home along the coast, January is the time when that intoxicating gift-buying can become a financial hangover.

Early estimates by Commonwealth Bank suggested the average adult in Queensland and New South Wales would spend more than $1000 on Christmas.

If this was done with credit cards or loans, their finances may now be on borrowed time. Australia's corporate regulator ASIC and its MoneySmart [COR] project is offering tips and tricks to help.

MoneySmart acting senior executive leader Suzan [COR] Campbell said the first step was to either pay off debt completely or pay off as much as you can.

"If you have more than one credit card, pay off the one with the highest interest rate first if you can't afford to pay them all off at once," she said.

She said Christmas was often an easy time to overspend, because "there seems to be a lot to spend it on".

"Have you ever spent a bit more on presents, food or drink over Christmas?

"It's probably a similar thing for other people."

Other tips include keeping your repayments up to reduce interest, close each account as it is paid off then lower the limit of your final credit card.

The MoneySmart website -moneysmart.gov.au - also has phone and tablet apps that allow you to build a budget or track your spending.

TOP TIPS:

  • Christmas left you with a giant gift-wrapped pile of debt? Use these tips to dig your way out.
  • Keep up your repayments so you are not charged extra fees
  • Pay the highest interest rate or smallest debt first.
  • Close each account as you go, until you are left with one credit card for emergencies.
  • Lower the limit on your final credit card.
  • Contact your bank/lender, they may be able to extend deadlines.
  • f you need extra help, phone national financial helpline on 1300 007 007.


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