Paul Clitheroe
Paul Clitheroe

Silly season survival strategies

THE festive season is with us, and while this is an exciting time of year it's important to take a sensible approach to your finances. Getting caught up in a frenzy of unplanned spending could leave you struggling to stay on top financially when the New Year rolls around. With this in mind, let's look at some simple strategies to help you manage your money over the holiday period.

First up, bear in mind that a merry Christmas doesn't have to be an expensive Christmas. If you've still got some Christmas shopping to do, check prices on the internet before you head out. You can save plenty, and use information about prices to drive a harder bargain with whichever retailer you dealing with.

It may be the thought that counts, but think twice before wasting money on unwanted gifts. A survey by online auction site eBay found that last year Australians received around 16.7 million unwanted gifts. Some of the stranger presents that weren't especially well received included dolls that made sexist comments and a dancing chicken. Not surprisingly many unwanted presents are now either pushed up the back of cupboards, part of landfill, resold or more disconcertingly perhaps, 'regifted' by the recipients.

Going halves in gift purchases with friends or family lets you spread the cost of buying presents and provides the opportunity to focus on quality rather than quantity.

Where possible, hold onto the receipts for any presents you buy. Gift recipients have the same refund rights as customers who buy directly but items can only be returned or exchanged if proof of purchase is provided.

Many of us will hold some cash in reserve for the post-Christmas sales. In fact, Commonwealth Bank research shows that around $2.2 billion could pass through the nation's cash registers in the Boxing Day sales. The sale period can offer savings but bear in mind a bargain is only a bargain if you really need, and can afford, the item in the first place.

Finally, even with all the festivities that will take place over the next month, it's a good idea to maintain sensible money habits. Paying just a small amount extra off your home loan in December and January will pay dividends in interest savings. While you're out shopping, look for an ATM that belongs to your bank's network or withdraw cash when making an EFTPOS purchase to avoid unnecessary bank ATM fees.  

Where possible use cash or your debit card to pay for purchases. Restricting the use of your credit card is one of the best presents you can give yourself at Christmas. Fewer purchases on your card today means a smaller balance when the statement arrives in January, and heading into 2013 with less debt is a great way to start the New Year.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit for more information.

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