Christmas is gone, leaving the credit card bills behind. Mum and Dad are back at work and the memories of our family holidays are left behind with only a few good Facebook brags to show of the thousands and thousands of dollars disbursed over the silly season. Then, comes February, the monthly statement for the credit card arrives. Ouch! Did you forget you had that much fun?
It’s a reality for all too many Australian families. We take time off at Christmas to spend away our guilt from working hard all year where we don’t get to see our children as much as we should. For many families, up to four weeks of unstoppable, unrationed entertainment is put on the credit card along with all the latest ‘must have’ Christmas gifts the kids aspire to. We wash away the guilt of double income parenting with a quick flash of plastic…. or so we think. But all too often that fun turns into financial stress for families when the bills arrive. Sadly, it seems to be becoming normal family behaviour to live beyond our means before and during Christmas and pay for it after. But I think the way we used to do it is more appealing.
What happened to saving up for Christmas all year long, a little bit at a time? Why have we stopped this solid practice of saving up for what we want to buy?
And if the shock of your February credit card bill has you in cold sweats, consider:
- Whether using an offset account on your home loan is actually working for you. Many people find the accessibility of cash in their offset accounts just too appealing and too easy to spend. Many times we advise clients that their offset account is their worst enemy….take ‘offset control’ back!
- Look at what you spent on credit over the Christmas period and review it pragmatically. Did you really appreciate all of that spend? Decide a total spending budget for next year. And now, knowing it is March/April, divide it by the number of weeks until Christmas. This is how much you need to put away every week to avoid this debacle next year.
- Start living within your means. Take a pragmatic review of every outgoing in your life and compare it with your income levels from both assets and employment. Decide on your compulsory savings levels and set some goals for the future. It can be a confront assessment for some but extremely empowering when Christmas comes around next time.
Christmas doesn’t have to be all about the money. It can be all about the special times, and can draw on a good plan to achieve a better outcome next year.
You have to ask yourself… do your children want your presence or your presents? And is what is left when you go back to work really worth the money spent.
This article was written by Tapel Cafer, Principal and Senior Financial Advisor