Are finances tight in your household this Christmas?

Christmas is around the corner and interest rates are on the rise again. It’s a challenging time for many. How are your finances looking?

A couple of years ago Danielle, a member of our financial counselling team, shared her ‘Top 10 Tips’ for breezing through the festive season and into the New Year with your finances on track. We’ve reproduced them again below.

“Tip #1:  Write down your budget.

If you write down a full year of expenses and income, you can average out those expenses that don’t occur every pay cycle, such as car registration and Christmas. This means you’ll be less likely to be left short and have to rely on credit.

Tip #2:  Track your spending.

Keeping a spending diary will help you to see how you’re going with your budget AND identify any expenses you’ve forgotten or missed.

Tip #3:  Stop using the credit card.

It’s easy to think you’re dealing with debt by making big payments towards your credit card, however if you keep using credit cards to make ends meet, you may not realise you’re actually getting further behind. (Not to mention all the fees!)

Tip #4:  Start a savings account.

Even if you have some debt, also having a savings account helps you to afford unexpected expenses AND it can also motivate you to reduce unnecessary expenses. Seeing your savings grow can make that new shirt look less appealing!

Tip #5:  Pay bills on your pay cycle.

If you pay a small amount each pay cycle towards each of your recurring expenses, you will be less likely to have to deal with an unexpected large bill and may even end up with your account in credit.

Tip #6:  Introduce ‘intentional spending’.

Everyone needs an occasional treat! If you budget for these expenses you won’t accidentally derail your financial goals, and you’ll be able to really enjoy them because you’ve made them affordable.

Tip #7:  Meal planning (and shopping with a list).

It can be really easy to overspend at the supermarket. By planning your meals (and shopping to a list) you’ll be surprised at what you can save—and you’ll be less likely to impulse buy. Plus you can check for all the non-perishable things that you use all the time, and only buy them when they’re on special.

Tip #8:  Get your family involved.

The household budget affects everyone, so get everyone involved!

Allowing young children to choose something like frozen pizza once a week, takeaway once a month or a family outing helps them to understand value, choice and the benefits of waiting for something special.

Have your teenager balance the household budget: they will get an understanding of what things cost and hopefully you’ll be setting them up for life – they will know what kind of car they can afford and the risks of getting stuck on the credit card treadmill.

Couples can make a set time to go over the finances and agree to combined goals – you will be working together with a clear understanding of how the household finances are going.

Tip #9:  Be open about your financial goals.

If you’ve decided that the New Year is the time to get rid of your credit card or build some savings, let those you love know. Plan to make changes for cheaper options, eg catch ups at home instead of eating out, or just buying (or making) a gift for one (adult) family member at Christmas. You could even start a healthy family competition to improve everyone’s financial literacy.

Tip #10:  Revaluate what’s really needed.

Take a look around your home; do you really need all that stuff? Selling or donating your unwanted clutter helps you become more mindful about what you and your family really need and value.”

More information

Click here to read how to make your Christmas celebrations more affordable.

Danielle is a big fan of the Australian Government’s Money Smart website—it’s full of useful hints and tips.

If you’re experiencing financial difficulties, contact the National Debt Helpline TODAY on 1800 007 007.

You’ll be connected with an Anglicare Tasmania financial counsellor and the advice you get will be simple, practical and FREE. You can read more about this service on the Anglicare website  and at www.ndh.org.au