Are We Facing A Fiscal Cliff?

Debt-Free New Year

All I want for Christmas is a debt-free new year

 

By AMP Financial Planner Dianne Case

 While Christmas is one of happiest times of the year, it can also be one of the most stressful when it comes to money.

With so many additional expenses to account for such as the cost of presents, Christmas food shopping and holiday outings, careful budgeting is essential.

There's no need to be a scrooge, but there are many simple tips to follow to ensure you enjoy the festive season without risking a financial hangover in the New Year.

Tips for controlling silly season spending:      

1. Get everyone to bring a plate – hosting Christmas lunch is expensive but you can spread the cost by asking everyone to bring a dish. Your family and friends won't mind being asked to bring a salad or dessert.

2. Be a savvy shopper – set a budget for presents and stick to it. Instead of buying for everyone why not organise a 'Secret Santa'. Also use catalogues and shop online to find the best deals. Vouchers are a great gift idea because you can use them in the post-Christmas sales and get more bang for your buck. Don't forget many toy shops offer no deposit lay-bys right up until Christmas.  

3. Go easy on the credit – while credit cards are convenient, they can be addictive over the Christmas period and undo a well-planned budget. Avoid buying gifts with credit, unless you are going to be able to pay off your card before interest is charged. You don’t want to be still paying off Christmas well into the New Year.

4. Start paying off your holiday now – if you’re going away over the Christmas break, try to pay off your accommodation costs in instalments before you leave. Make sure you holiday within your budget and avoid paying for expensive overseas travel on your credit card if you won’t be able to pay it off quickly.

5. Bake it or make it – if you have a talent for craft or baking you can create inexpensive presents such as home-made fruit cakes, rocky road, jams and relishes. If you can sew, knit or have some other skill, a personalised gift will be even more special.

6. Budget for New Year expenses – when doing your Christmas budget, don’t forget to factor in some of the big expenses you’ll be facing in the New Year. If you’ve got children, be mindful that all those back to school costs are just around the corner. You’ll also have a new round of bills starting to roll in, such as rates, electricity and phone bills.

So with a little thought and planning now, it is possible to have a jolly festive season without blowing a hole in the budget.

Once the fun of Christmas is over and the summer holidays a distant memory, you can then look forward to getting off to a flying financial start in 2013.

 Dianne Case is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.

Any advice given is general only and has not taken into account your objectives, financial situation or needs.  Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.

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