“Most people would agree that the whole period leading up to Christmas is pretty scary for the budget. And it isn’t just the gifts, it’s also the additional costs associated with a busy social schedule that can really add up,” said Renee Amor, RaboDirect spokesperson.
 
“Needless to say, the best strategy is to have savings, and to purchase gifts throughout the year, but the reality is that for most people this hasn’t happened.  And by the beginning of November, with Christmas just seven weeks away, the sense of financial fear starts to grow.
 
“Don’t lose heart though. There are a number of things you can do to make sure you emerge from the Christmas season without debts you’ll be paying off until Christmas next year.”
 
Ms Amor went on to say that consumers should leave going into the red to Santa, and outlined five tips for staying in the black:

1. Between now and Christmas, put aside the absolute maximum you can afford per week to pay for gifts. Even $50 per week is almost $400 that won’t have to go on the credit card.
2. Think about your Christmas list and ask yourself whether you need to buy for absolutely everyone on it. Remember: one in five Australians typically receive a gift they don’t want.
3. It’s the thought that counts. Most people are touched by a homemade or baked gift…and cooking at home won’t break the budget.
4. Leave yourself enough time to buy gifts.  Some of the most expensive purchases are made because time is short and a spending frenzy occurs.  If you leave yourself enough time to think and choose carefully, you can make more sensible choices.
5. When you go out to celebrate, set yourself a budget.  It is very easy to spend surprisingly large amounts without realising it. Try taking cash only, that way you are limited to spending only what you have.

Looking forward, Ms Amor said, if you do get to January with a sinking heart and maxed out credit cards, the best form of defence is a good offence. 
 
“Start preparing now for next year. The first thing you will want to do is pay off any credit card debt.  It is likely the most expensive debt you have and should take priority. Your bank can help you work out a payment plan if you are really struggling,” Ms Amor said. 

“The best way to avoid history repeating itself at the end of 2013 is to start a regular savings plan at the beginning of the year.  Bear in mind that if you use your everyday transaction account for this purpose, or even a separate ‘savings’ account with one of the major banks, you are probably earning little or no interest on your money.”
 
The recent RaboDirect National Savings and Debt Barometer found that Australians are missing out on almost $3.5 billion in lost interest every year by keeping their money in low interest bearing, rather than true high interest saving, accounts. RaboDirect is calling on consumers to take control of the situation, encouraging them to check what interest rate they are currently getting and to see if they can find a better deal.
 
“We have been very vocal about the fact that the major banks have been giving consumers the raw end of the deal with their low-interest bearing accounts. But it is up to consumers to take heed and to do something about it. And there is no time like the present,” Ms Amor said.
 
Ms Amor concluded by saying that with the new year not far away, it is a timely reminder to take a step back, to put some plans in place, and to work towards improving your financial outlook.
 
“A bit of prior planning and saving, and Christmas 2013 will look a lot better come November next year!”

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