Word of Advice

10 November 2008

Tips for avoiding a debt-laden Christmas 

It’s started…the first Christmas ads have appeared on TV and Christmas crackers have made their way onto the shelves at your local supermarket. And even though we all know it’s approaching, for many of us the overall cost of Christmas still comes as a surprise.

With many of us tightening our belts when it comes to spending, this Christmas may be a time to really look at how much we spend over the festive season. With this in mind, we’ve got a few suggestions on how to stretch your dollar.

Plan ahead

Start by making a list of people you want to buy presents for and how much you are going to spend on each person (do not let other family members see this list or there may be even more arguments over the Christmas dinner table). Add in any costs for travelling and entertaining you’re going to do.

Avoid shopping traps

By sticking to your shopping list and shopping a bit earlier on, you’ll be able to avoid the crowds and get everything you want without having to resort to panic buying on Christmas Eve.

When doing your Christmas food shop, draw up a full shopping list before you go to the supermarket – so you’re well prepared and have an idea how much it will all cost.

Try cash

The idea of getting through Christmas without your credit or store cards may be a bit scary but now is not the best time to be adding to any balances. Only spending what you’ve got in the form of cash could save you months of debt worries in the New Year.

It’s also too easy to hand over a plastic card when you buy something, but if you’re handing over a $50 note in a shop it can make you think twice about whether that purchase is really necessary.

Loan and credit traps

If you do decide to get into debt, find out how much more you’ll be paying for goods on credit before you decide to sign a contract – the lender has to tell you this. Then check the interest rate and compare it with other lenders, noting what any fees will be. Take account of insurance costs – is payment protection right for you? Also think about when payments are due. Will they coincide with other regular household bills and expenses?

When you enter a credit contract, this information must be given to you by the lender in written form, it’s called a ‘disclosure statement’. It contains information about your credit contract including payment information, interest rate and cancellation rights.

Consumer Issues Advisor, Joanne Kearney, says: “It’s easy to get into debt at Christmas time. Talk to a budget advisor well before the Christmas period to sort out a budget which won’t place too much stress on you and your family in 2009.”

Further information

You can call 0508 BUDGETLINE (283 438) to find your nearest service or to speak directly to a budget adviser. Or visit New Zealand Federation of Family Budgeting Services Inc website [external website] for more information.