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How to manage your credit card debt this Christmas

Tips for avoiding the post-festive season blues

Christmas is a wonderful time of the year. Taking time off work to catch up with family and friends, putting our feet up, and giving ourselves licence to overindulge a little – what’s not to like?

Well for many of us, the post-Christmas spending blues are definitely something to avoid!

As well as the “tale of the scales”, we also need to beware of overindulging in the financial sense.

It can be all too easy to get caught up in the hype created by the marketing that hits us at this time of year, as brands strive to part us from our hard-earned money. And since we live in an increasingly ‘get now, pay later’ society, spending can quickly spiral out of control.

Those post-Christmas blues can hit pretty hard when we’re back at work and the joy of Christmas seems so long ago. And to top it all off... then the dreaded credit card statement arrives!

"Wealth creation is just for the wealthy" We disagree

The incredible cost of credit card debt in Australia

Did you know that over 70% of Australians have a credit card? And that on those credit cards we collectively spend nearly $52 billion (yes that’s billion dollars) each year? That’s a staggering figure.

The really scary part is that nearly 63% of that debt (amounting to $33 billion) isn’t paid off on time – and therefore accrues interest payable to the banks. It’s no wonder the banks are doing so well!

So how can you ensure you aren’t left paying interest to the banks when the post-Christmas credit card statement arrives? How do you ensure you can cover the charges?

It’s not about not having fun over the festive season. Rather, it’s about thinking ahead and preparing yourself both before and after this great time of the year, to get yourself back on track financially.

Here are our top 4 tips to help you to be prepared and manage your Christmas credit card debt.

1) Develop a spending plan

Start by understanding how much you actually spend throughout the year. Develop a spending plan that captures all your annual expenditure, including Christmas presents, holidays, gifts, dining out, alcohol, entertainment, and everything else.

2) Check your expenses against your income

After subtracting your total spending from your after-tax income, check to make sure that you are in a positive savings position. You should aim to save around 10% of your after-tax salary to ensure you build a savings buffer and to invest for your future retirement needs.

3) Keep track of how you’re travelling

At least every month, double check how your spending (and savings) are going compared to your plan. That way, you can make any quick adjustments that are needed to get you back on track and achieve your planned savings goal for the year.

4) Save throughout the year for Christmas expenses

Establish a separate savings account for your Christmas spending. Saving a little each month can ensure that when the time comes to pay the credit card off, you have the funds you need – and there are no post-Christmas blues!

Meeting with a HM financial adviser

Need help with your Christmas credit card debt? Talk to HM

At HM we love helping everyday Australians establish their goals and spending plans, and then working hand-in-hand to achieve them. It’s so rewarding.

We invite you to come in for a complimentary goal setting exercise to help you manage your Christmas credit card debt – and avoid the post-Christmas blues. We are here to help.

We wish you a fantastic, safe and enjoyable Christmas, and all the very best to you, your friends and family in 2019. For a complimentary no-obligation chat, call us on 07 3229 3688 or use the simple contact form here.

Posted by Henderson Matusch on Nov 14, 2018 2:04:51 PM
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