Christmas is only 46 weeks away. That’s about 320 sleeps.
Many Australians are nursing holiday spending hangovers burdened by credit card debt, but now is the time to start planning to avoid getting caught in the trap again.
Here’s how you can do it.
If you have rolled into 2019 with credit card debt, Customer Owned Banking Association chief executive officer Mike Lawrence said you should “extinguish that as quickly as you can”.
“Knock that debt off and then think about your approach going into next Christmas,” he said.
“Do you want to be in the same position at the end of next Christmas owing money on credit cards?”
These cards usually have interest rates above 20 per cent so if it isn’t paid off in full each month costs quickly blow out.
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DO THE SUMS
Tally up how much you spent last Christmas and then work out what you need to save each week or pay cheque to have the same amount come December 25.
Beyond Bank general manager of customer experience Nick May said starting saving now was key.
“Lots of us get paid fortnightly — that means 26 pays per year to try and save — we are almost three pays down already for 2019 — if you haven’t already started you need to,” he said.
Tucking away money into a savings account that cannot be dipped in and out of it ensures your kitty of cash will grow throughout the year.
Mother-of-two Danielle Smith has a portion of her pay going into a Christmas Club account — once a popular savings tool that is still offered by many financial institutions.
“I have about $100 a week go into the account so I’m not looking for money at the end of the year to buy gifts for everyone,” she said.
“We used the money this year to buy a puppy, go to our shack at Christmas, going out for dinners and a little bit of spending money.”
Mr Lawrence said Christmas Clubs accounts — a fee-free option — prevented undisciplined accessing of cash until closer to Christmas time.
“If you are someone who is quite disciplined you could look at a savings account that pays a good yield, but the risk is you can access the money whenever you want,” he said.