Christmas Spending and Credit Card Management
Now that the Christmas period is over, it is time to take stock and assess your financial position. For many, the Christmas period is fraught with danger, resulting in over spending, maxed out credit cards and ballooning monthly bills. Financial hangovers caused by overuse of credit cards can be quite stressful and unless you take significant steps to take control, the hangover can last for months or even years.
Here are some rules to help you take control quickly:
- Track your spending
- Review your credit limit and reduce to a sensible level if able to
- Try to pay your balance and more than the minimum amount on time
- Avoid using your credit card to to make ends meet, no matter how tempting
- Always take time to check your credit card statement
- Consider using a debit card If you are concerned about over spending
To avoid the same situation occurring next Christmas, be proactive and take positive steps to prepare for Christmas well in advance. The first and perhaps best step is to prepare a realistic Christmas budget.
Begin by making a Christmas expense list containing all the expenses and sorting them into categories like gifts, food, beverages and trips. Ts will help you identify any areas that you may be able to prune back and give you a good estimate of what your Christmas expenses look like well in advance. You can then save accordingly.
It may be worth opening a new bank account with the specific purpose of saving for Christmas . Making small deposits throughout the year can certainly add up over time. Simply paying $50 per week will mean a Christmas stash of about $2500 – that’s a lot of Christmas cheer. You can even set up direct payments from your salary or main bank account to make the saving easier.
Where gift giving is concerned you may like to organise an agreed sensible spending limit with friends and family. Thus still maintaining the pleasure of gift giving while removing some of the excess expenditure.
Taking control of Christmas spending now is a sure way to ensure a positive start to the New Year and achieving your long term financial goals.
If you would like assistance in achieving your financial goals please give the team at Australian Finance Hub a call.