The festive season doesn’t have to put strain on your wallet.

The festive season can bring a lot of cheer and excitement, but also financial stress. Here are some tips to help you stay on top of your finances.

We all love the festive season. The weather is warmer and there are countless parties, BBQs and events to attend, not to mention big family get togethers.

However, as well as being a busy time of year, it can also be stressful on the back pocket. The pressure of gift giving, coupled with the evenings out and taxis can increase spending.

According to Statistics New Zealand, in December 2015, Kiwis spent $6 billion on shopping – the highest figure ever recorded. Yet, a Colmar Brunton survey this year found that one in five New Zealanders were struggling to make ends meet.

With so much spending, it’s easy to feel a little bit like old Ebenezer Scrooge, but thankfully that doesn’t always have to be the case.

A few weeks out from Christmas is the perfect time to look at the financial decisions you’ve made in your past and implement change for any present and future decisions.

The (financial) ghosts of Christmas…

Past

According to research from MasterCard, more than half of all New Zealanders (51 per cent) have said they feel some financial stress due to the extra outlay over the holiday period. Often this stress carries into the New Year, especially when bills start to roll in and credit cards need paying off.

So, think about that stressful feeling you got last year and try to learn from the mistakes of your past. If you over spent last year, figure out why it happened and how you can avoid it. Maybe Santa needs to be a little stingy this year (and that’s ok!) or maybe you just need to attend a few less parties to keep spending down.

If you’ve always put holiday spending on your credit card and then struggled to pay it off, consider consolidating debts – perhaps into your home loan or a personal loan. Not only could this mean a possible reduction in your interest rate, but it also means there’d only be one payment coming out of your account each month. Also, consider speaking to your lender to discuss your situation if you are having difficulty paying any credit debt.

However, consolidating credit card debt, whether it’s into a home loan, personal loan or interest free credit card, isn’t a long term solution and you don’t want to be paying off the debt for years. So have a plan to pay it back as quickly as you can.

Present

It’s now less than a month to Christmas, so we’re getting to the business end of your spending.

If you haven’t learnt from your past ghosts, then you might not have a financial plan in place for Christmas. Thankfully it’s not too late.

Tools like Pocket Smith are great for providing budgeting help so you can better understand your money and what your projected savings/spending will be. Or, if you are looking for something a little more simple, the big banks all have a range of different budgeting tools on their websites that you might find useful.

One idea to save money might be pooling your gift money together with family and then all going out and doing an experience together. Whether it’s a picnic at the beach, or a night at a concert – by pooling your money together it will go further, so you may not have to spend as much.

Future

You might start the New Year with a slight hang over, but make sure that’s the only thing hanging over you next time around. The months after the busy season are dictated by the months leading up to it, so start thinking about next year’s credit debt

So, in January look at how much you spent this Christmas, then write it down and divide it by 52. That’s how much you need to save each week to have the same amount by next December. Open a savings account and use the automatic transfers you can be set up via online banking to save that amount each week – then you may not need to even use the credit card next year.

Or, perhaps you can alternate one year where you spend normally, and one where you are more frugal to see if it helps with your spending.

You could even try other things like saving wrapping paper or decorations that can be re-used so that there’s no need to buy everything new each year.

Remember, the festive season should be a time to unwind and relax, not to worry about money. So, put the right structure in place now to make sure you spend this time sipping cocktails and lying on a beach relaxed, not worrying.

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