Christmas is coming!!! Less than two months to go – gulp. If you have started to think about buying gifts, but don’t have much cash to do that with – then now is the time to start saving or to think about taking out credit to cover the costs. We look at the best ways to stay smart about credit over the Christmas period – and show you how a budget could save you money and reduce your chances of succumbing to bad credit history by racking up Christmas credit card debt you can’t pay back.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.

David and Libby Koch recently wrote a great article on saving money over Christmas ‘Budget for the festive financial cliff.’ They advise you to start saving now, and sidestep credit as much as possible to avoid the February blues after the credit card bill comes in.

“The Christmas, New Year and summer holiday period can leave even the best-run family budget in tatters.

It can be a huge drain on family finances and cause a lot of undue stress. But by starting to plan early you can make sure that it’s a relaxing and affordable time for everyone, even the organiser.

We’re not talking about two weeks out, we mean two months out and that’s now,” they write.

Planning is great advice, and that can include sitting down now and writing your shopping list, whilst you are calm and slightly removed from the Christmas madness which often sees us overspending on everyone.

The Kochs’ advise setting a budget, “set realistic limits and ensure everything is accounted for.”

Their top tips include:

• Suggest a Secret Santa

A great way to keep the cost of presents under control is through Secret Santa, where everyone draws a name out of a hat and only buys a present for that person. This works best for big extended families and with a pre-agreed limit for everyone to spend on their gift.

Not only does it put a cap on costs, but also means everyone gets one good present instead of lots less useful gifts. That’s the plan anyway.

• Write down what you want for Christmas

Try writing down the things you want to buy for yourself over the next couple of months. Then, next time somebody asks, think back to that list and hopefully you’ll get something you would have spent money on anyway.

They also suggest:

• Buy in bulk and give extended family the same item.

• Give a voucher for your time – to babysit, garden, etc.

• Make a gift such as craft items or cookies.

• Regift any of those unwanted presents.

• Make a tax-deductible donation to charity.

Want more tips? Earlier in the month savingsguide.com.au posted some tips for getting frugal over Christmas ‘A Frugal Christmas: 5 Things To Do Now’. Here are a couple of great ideas:

• Tally up what you spent last year

There’s no way to prepare for the event- a joyous one to be sure, but difficult to fit into already stretched budgets- without knowing exactly what you spent

[last year]. My figure always gives me a heart tremour when I see it. You might be resolved to spend less, but it’s crucial to know what you’ve been spending.

• Budget Cuts

Shave ten dollars off each present you have to buy, commit to not buying presents for yourself as the season really kicks off (I am deeply guilty of that one, every year) and look at organising three of four major events, as opposed to trying to attend twenty smaller ones. Rewrite your budget to take into account your ideal expenditure.

Credit can be really handy at Christmas time – but just because you’re putting something on ‘the card’ doesn’t mean you can ignore a budget. At some stage you will pay that credit back. So it is really important to watch out for overspending with credit at Christmas. It’s easy to get caught up in the “Christmas spirit” – but don’t spend what you can’t afford.

You may, as many do, feel the pressure to “give” so much you do so at the expense of your own budget and ultimately end up with a debt you can’t pay back. The end result of this can be getting into more debt to pay the original debt. It eventually catches up with you, and you end up with loan commitments you can’t meet or other bills get neglected because you just can’t afford to pay it all. Creditors start to default your credit file. Your financial freedom is compromised.

This is why budgeting is so important.

There is always something great you can buy that fits in your price range.  It just takes a bit of thinking. Besides – isn’t it the thought that counts? If you take the time to think cleverly now, you won’t be tempted to overspend in a mad panic later. And at the end of the day, your good credit rating won’t be suffering in the New Year, due to credit card debt.

If you have a default on your credit file, or other bad credit history which you don’t believe should be there, then we may be able to help remove it and give you back your clean credit rating. Contact a MyCRA Credit Rating Repairs to have a no-obligation chat with a Credit Repair Advisor about your situation. If you want to know more about your credit rating, or credit repair – or visit our main site www.mycra.com.au.

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