Mother-of-two Jill Stewart usually gets "very caught up" in the Christmas season and spends more than she should. This year is different.
Stewart, a Sydney-based PR professional, paid off all her Christmas presents by the end of October and is now getting organised for Christmas Day itself.
It's her turn to host the family Christmas this year. Cue ham, turkey, salads, desserts and presents for 10-12 people.
"It does add up," says Stewart of Christmas Day. "Figure-wise I probably couldn't say exactly but it does add up into the thousands."
It's also a time of year that's stacked with other financial demands for her family. This month the balance on their Crowdy Head holiday rental is due and in December the registration for their two cars.
Yet they are covering it all without the help of a credit card.
The key for Stewart was that she started planning early, popping Christmas gifts for her children, aged two and five, on lay-by.
"I've always poohed-poohed it," she says. Yet by making fortnightly payments she had the presents paid off before the end of October.
"I've got two items for both my children and it was probably half of what I'd usually spend," she says, adding she's now turning her attention to Christmas food and decorations. She's kept a little gift-buying money in reserve, too, so she can still get out among it in December. "It's not Christmas without it."
For many of us, this week is a tipping point where the end of the year starts hurtling towards us at alarming speed. It starts with the Christmas parties and end-of-year events; segues into last-minute shopping; and before you know it you're starting a new year with an overloaded credit card. Again.
But that slide into a New Year debt hangover doesn't have to happen. Like any other pattern it's possible to create a different outcome by making some changes now.
If you can feel the pre-Christmas panic rising, there's still time to make some different choices to help yourself have a happier financial start to 2016.
Focus on what you can afford
Last year, every Australian over the age of 14 spent on average $2500 in the six weeks before Christmas. If that goes on a credit card and doesn't get paid off, the cost escalates. And it's not just the dollars that pile up, so can the wear and tear of financial stress on you and your relationships.
Amy Lanham is the communications director for Christians Against Poverty, which runs free money courses via local churches at 320 locations throughout Australia. It helps people shift from credit-card dependency to a cash-only budget, not just at Christmas but year-round. She says there's generally a spike in phone-calls both before and after Christmas as people wrestle with financial pressures and sometimes debt collectors.
Her advice for preventing the festive season debt hangover: be honest with yourself and your family about what you can afford.
Rebecca James, chief marketing officer, ME, the industry super-fund-owned bank, is a fan of the list. "Know how many people you're buying gifts for and set a limit on what you'll spend on each, then you can shop according to your price range."
Gavin Fernando, director, financial services, Prosperity Advisers, suggests totting up how much you spent last year to get a rough idea of what's ahead. Apart from presents there's food, drink, catch-ups with friends, party clothes and haircuts, holidays and petrol that might need to be included in the spending mix.
Next step: decide how much money you can realistically devote to Christmas this year.
"Just having a plan and knowing how you're going to manage your finances through that period when there's a strain on them will actually give you some sense of relief and comfort," he says.
Ease the expectations
Often overspending is the product of feeling pressure to meet other people's expectations, or even your own, about what Christmas should look like. Keeping things in perspective means working out what is important to you not just on that day but in the weeks that follow. What would it feel like to start the year feeling in control of your money?
Queensland financial counsellor Fiona Hawkins suggests a mental reality check can help. "Think about whether the amount you spent on last year's gifts was worthwhile and how much food was left over," she says.
Keep in mind that the simple moments are often the best memories. "Ask yourself what your loved ones enjoyed about past Christmases," says Hawkins. "Did they get pleasure from spending a special day with people they care about; preparing a meal together; lazing around; having a laugh and catching up?"
Sticking to your intended spending at Christmas may mean having a conversation with family and friends and agreeing how much you are going to spend on presents or asking everyone to make a contribution to festive food and drink, says Lanham.
When Stewart's Christmas involves her extended family of 20 they opt for a Kris Kringle.
Having that conversation upfront makes it easier on everyone.
Close the gap
Aim as much as possible to make it a cash-only Christmas. Lanham says when people doing the CAP Money course move to a system of using cash and withdrawing a set amount each week, it reduces their spending by about 20 per cent.
If your expected spend doesn't match up with your ready cash work out how you can close the gap.
It might mean trimming the amount you spend on each present or giving a handmade gift. Think meaningful rather than bigger is better, suggests Lanham. "That little bit that you hold back at Christmas-time is going to save you a whole heap of heartache later on when you've suddenly got those credit-card bills coming in."
To spread the cost there's always the option of a future present: offering to babysit, wash someone's car, or arrange an outing in the new year.
Another way to drive the dollars further is to hold off on exchanging presents until the Boxing Day sales begin. Alternatively, James says shop early: "The closer it gets to Christmas, the more likely you are to panic buy and break your budget."
With time on your side you can be resourceful: look for bulk deals on alcohol; compare prices online; convert reward points into gift cards or use them to fund Christmas food or drink; organise a house-swap or a house-sit for an affordable holiday.
Reverse the cycle
Think of all those things we do in February because we've overspent during the holiday season: keeping the credit card out of easy reach; sitting at home on weekends; putting takeaways on hold; having a garage sale or selling things on eBay. Do some of those things in the run-up to Christmas this year.
"Cutting back on social outings and discretionary spending like clothing or coffees at work between now and then can quickly help you generate a Christmas buffer," says James.
Limit the damage
If going into debt seems unavoidable, working out how to limit the damage can help you feel more in control.
"The first thing to do is to check what your mortgage allows you to do," suggests Fernando. "There might be an ability to redraw from your mortgage and that will generally be a better result in terms of the interest rate than using credit cards."
If redraw isn't an option, he says, choose your plastic carefully. Spending on a store card is going to cost a lot more than a no-frills credit card if you end up in debt.
To cap the temptation to overspend, Lanham says people could contact their financial institution now and reduce their card limit.
Fernando advises people to stay aware of their credit card during the festive season rather than turning a blind eye to a growing balance.
"If you know how much is going on your card and you have given some thought to how you're going to attack that in the new year to get it down and make sure it doesn't happen next year that's still a plan and it's still effective," he says.
Lanham agrees, saying that plan can help prevent debt from spiralling: "It's when you're not paying your credit card bills that the interest skyrockets and that's when people move from struggling a little bit with money to actually getting into a place where it's unmanageable."
How to make next Christmas merrier
1. Start saving sooner
James suggests making regular deposits into a high-interest savings account.
To save $2500 in 12 months at 3.5 per cent, you have to put aside $204.42 each month. Leaving it until October means saving $1244.55 each month.
2. Consider Christmas Club accounts
These accounts, offered by the likes of IMB and Heritage Bank, help you stick to a Christmas saving goal. They generally only allow savers to withdraw money between November 1 and December 31. An earlier withdrawal requires you to close the account and no interest is payable.
There are no fees and the interest rate can be up to 2 per cent.
3. Look into lay-bys
Major department stores and the likes of Big W, Target and Kmart offer lay-bys as do some small retailers. There are also online lay-by sites such as Laybyland and STA Travel offers lay-bys for some domestic and international flights.
Terms vary from three weeks to 12 months, depending on the provider. There can be service and cancellation fees.
You only get the goods when you make the final payment.
If you fail to either make all the payments on time or to collect the lay-by, it is considered a cancellation. Then payments made are refunded less a $12 cancellation fee.
- Aim to have a cash-only Christmas
- Know what you can afford
- Tot up what you spent last year and set a spending plan
- Find ways to limit expenses or boost income
- Be resourceful and shop early
- Stay aware of your credit card balance