How much do Australians spend at Christmas?
Australians were predicted to spend more than $48 billion in stores last Christmas, according to an Australian Retailers Association (ARA) report from November 2016. That was an expected 2.3 per cent increase over spending in the 2015 Christmas period.
“Traditionally, the biggest shopping period of the year is the week before Christmas, though many Australians are set to cross off their Christmas lists early and hit the shops from mid-November when we see sales start to increase,” said ARA Executive Director Russell Zimmerman.
Individually, Australians planned to spend just under $1,000 each on average over the holiday season, as reported by MoneySmart. Spending on gifts is one of the biggest expenses and if you aren’t careful about your spending, you may have to dip into your savings. That’s not an ideal situation. Festive season spending will increase your expenditure for the end of the year, there’s almost no avoiding it. But you can lessen the impact of that increase with these smart strategies.
1. Keep track of your spending
Make a weekly budget specifically for December, and don’t go over the limit. That might mean buying fewer presents for your family or attending one less party where you’re expected to bring a gift or plate of food to feed 20 people, but it’s all in the name of financial security.
2. Pay off your debt quickly, or consider a balance transfer
The average added credit card debt after the Christmas period is $1,666, according to MoneySmart. You should try to get rid of your debt as quickly as possible. More than a quarter of people pay off their Christmas debt within six months, 70 per cent take between six and 24 months, and 4 per cent pay it off after two years.
If you think it will take you too long to pay off your debt, considering transferring your balance to a Police Bank credit card. With a balance transfer rate of 0% p.a. for 12 months, it can be a handy way to get on top of your debt for the new year.
3. Shop online
Doing the bulk of your Christmas shopping online could save you a significant amount of money. Australian shoppers can save up to 23 per cent on their Christmas shopping by planning ahead and finding the best deals from online marketplaces, according to a SocietyOne media release from November 2016.
4. Recycle gifts wherever possible
It might seem cheap, but there’s no point in hanging onto four copies of the same cookbook that you’ve been given throughout the year. Re-gift what you can, but don’t do it if the item has been used, and definitely be careful not to give something back to the person who originally gave it to you!
5. Avoid paying for expenses with your savings
As many as 75 per cent of Australians paid for their Christmas gifts in 2016 with their savings, as reported by MoneySmart. That’s not what your hard-earned, hard-saved money is meant for – keep that for the big things like a home deposit or a family holiday. Consider using your credit card for gifts, but make sure you follow the above strategies and don’t go overboard with your spending.