Is it too early to plan for Christmas?

Christmas is often a time for overindulgence of all kinds. Good food, good cheer, good company - but then come the hangovers. And some of these hangovers last longer than others, including the one for your bank account.

According to research from Finder, New Zealanders end up collectively spending over $5 billion over the Christmas period. That’s just under $1,500 on average per person, with the biggest festive expenses being travel ($439 on average) and gifts ($411 on average).

While it’s the season to be jolly, all that spending doesn’t always bring much joy. Most of us are at least a little stressed about the amount of money being flung around at Christmas time, and about one in four adults end up going into debt to pay for everything. Some are even paying off the debt by the time Christmas comes around the next year.

That can end up in a nasty debt circle that’s tough to spin yourself out of. So what’s the answer?

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Saving by Christmas light

Even if you roll your eyes at seeing Christmas decorations already up by 1 November, the reality with money is that it’s never too early to get ready for Christmas - or any other big spending event of the year.

We’re not here to say you need to cut back on spending over Christmas. You get to decide how hard you go over the festive season. Instead, some people like to set up a dedicated Christmas fund that they add to every pay cheque. That way, they always have a little tucked away so that when St Nick comes calling, they don’t have to break out the credit card.

Let’s say you’re the average Kiwi and spend $1,500 at Christmas time. That translates to $30 a week needed over the prior year to save for a full-on, debt-free Christmas. 

Set this up as an automatic transfer, and you may not even notice the $30 is gone - until it's Christmas time and you get to spend it!

Combine this with tactics like buying gifts throughout the year when they’re on sale, signing up to a Christmas club at your local grocery, or switching to a Secret Santa for the adults in the family, and a debt-free Christmas could be totally doable.

As always, the best weapon you have in your fight against debt is knowledge. Money is always mahi, and don’t let anyone tell you otherwise - and a lot of that mahi is around preparation.

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This was originally posted as an education article on the Money Sweetspot customer portal. If you read this as one of our customers, you would've earned some money off your loan! Do the mahi, get the treats. Find out more.

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