Christmas is a time that has defined sale trends for decades now. It is a time when people all over the world come out of their cocoons to shop for home decorations as well as presents for their loved ones. However, there is a fine line between spending in accordance with the season’s festivities and holiday overspending.
With the rising popularity of the credit card culture, people are often comfortable with overspending during Christmas without paying much heed to the consequences. According to a recent survey conducted by Discover Financial Services, around 14% of people had the habit of overspending during Christmas. The figure has risen by an alarming 4% since last year’s survey.
Overspending during holidays can leave your life in a state of mess once you get out of your holiday frenzy. The most daunting consequence of Christmas overspending is debt. According to the Reserve Bank of Australia, credit card debt in Australia has risen by an astounding 42% in the last five years to about $49.3 billion. Moreover, according to the Australian Bureau of Statistics the average debt for each household is now at $50,500 which is up to 34% higher than the household debt average on the last report. As a result of this overspending, people who overspend during this holiday have to suffer the consequences throughout the following year which affects their professional as well as personal lives.
Therefore, it’s imperative that you get a grip on your Christmas spending habits with the holiday looming right around the corner. According to Sean Teahan who is the co-founder of Cash Doctors, “One of the most important things to do this December is to think of the consequences that overspending in the silly season can have on your finances in the New Year. Current financial conditions are healthy for retail spending, but we still need to be aware of the urge to splurge.”
In order to address this Christmas financial stress, here are a few tips you can follow. The first thing to do is to plan your Christmas budget beforehand. Start saving early on and shop for gifts and accessories whenever a good opportunity rises throughout the year. There is no sense in waiting to shop when the prices hike up during Christmas. Furthermore, you should spend some time researching before making any purchases. According to Greg Ellis from Cash Doctors, “Online shopping is a great way to compare prices before you head to the shops. If you choose to shop online, be wary of the temptation to fill up that online shopping cart full of purchases, especially if you’re paying with a credit card.”
Additionally, you can get creative and make the most out of an economical purchase by giving it your ‘personal touch’. For some people a $25 handmade basket matters more than an exquisite $100 vase. Make a Christmas budget beforehand and stick to it. If you manage to discipline yourself during this season, you won’t have to worry about debts and limited spending in the future. Therefore, start planning for Christmas. It’s never too late to get your finances in order.
What are your best tips to avoid financial stress at Christmas time? Leave your comments below.