Christmas Dollars & Sense
Illawarra Mercury
Tuesday November 14, 2000
CHRISTMAS comes but once a year, yet many find themselves paying for the holiday for months afterwards.
Advertising hype, demands by children and attempts to ``keep up with the Joneses" spur a lot of families into spending more than they can afford over the festive season.
The following tips may help ensure that you not only have a great Christmas but a happy new year!
Avoid using credit cards
This may seem obvious, but many of us fall into the trap of putting items on credit, according to Wollongong Creditworthy team leader Russell Franks.
The organisation, which is part of Mission Australia, offers free financial planning services for those trying to avoid, or get out of financial difficulties.
``February and March are the busiest times of the year for us. This is when the credit card statements start to come in after Christmas and people start to experience real difficulties," Mr Franks said. ``Credit cards can put people in terrible situations if they don't keep a control on them."
Unfortunately, Mr Franks added, many financial institutions used this time of year to drum up more interest - literally.
``Towards Christmas many credit card holders get letters offering them increased credit limits. In one case I know of, a gentleman was offered a increased credit limit just after he had retired - when he had even less chance of repaying it," he said.
``If these financial institutions don't do assessments of whether a person can repay, it is important for the person offered the increased limit to do their own assessments on whether they can afford it."
Mr Franks also advised people to look carefully at interest rates: ``Credit card interest, for instance, tends to be cheaper than store cards."
The best option, he said, was to layby Christmas gifts, with many stores offering longer layby periods at this time of year.
Stick to a budget
Working out a Christmas budget can ensure you are not paying for the holiday for the next 12 months.
Putting a bit away each week was much easier than trying to come up with a lump sum at the end of the year, Mr Franks said.
``You'd be surprised how much you actually spend over the Christmas period," he said. ``Along with gifts for family, friends and colleagues, there are the decorations and the food. There are also a lot of added expenses that many people don't take into account such as travel, entertainment, day trips, pocket money and even new outfits for the festive season."
Drawing up a realistic budget with the help of a financial planner was one way to stop overspending, Mr Franks said.
A Christmas club account was also an ideal way to save.
``That way you're paying for Christmas before it comes, rather than paying for it for the next 12 months - which can happen if you use credit cards," he said.
Even now, with just under six weeks until the big day, people could benefit from budgeting correctly, Mr Franks said.
``Just make a quick assessment of how much everything is going to cost and plan how you will pay for that over the coming weeks," he said.
``Try to get your shopping done as early as possible to avoid panic buying. Also make sure you don't blow your budget by taking a shopping list, as this will avoid impulse buying."
Resist Christmas pressure
Pressure comes from all quarters in the lead-up to Christmas.
Advertisements for new products hit you every time you turn on the television or flick through a magazine; the kids are hitting you up with their Christmas lists and the next door neighbour's home is lit up by a thousand lights.
Mr Franks advice? ``Firstly, beware of advertising hype - the advertisers will have you buying everything," he said. ``Secondly don't try to keep up with the Joneses - stick to your own budget. And, most importantly, resist pressure from the kids, and if possible, don't take them Christmas shopping with you or you may end up pressured into buying more than you set out to."
Mr Franks also advised against ``guilt buying".
``If a couple has split up, for example, the remaining parent may try to make it up to the children by buying them expensive gifts," he said. ``If money is an issue, this will only mean the months following Christmas will be a real struggle."
Cut costs
Many of us buy expensive wrapping paper and Christmas decorations year after year but there is no harm in re-using these if they are in good repair.
If not, discount stores are great, offering festive decorations, cards, wrapping paper and even lollies and nuts at very affordable prices.
It is also a good idea to think ahead.
Christmas paraphernalia is vastly reduced after the big day and items like greeting cards will certainly last the distance until next year.
You can also take advantage of the after-Christmas sales to buy items that won't date or spoil and can even be used as presents for next year. Shopping at mid-year and seasonal sales can also be a good way of collecting items for Christmas.
``Wrapping paper can be quite expensive when you have a large number of presents to wrap. Simple things, like buying large rolls instead of the more expensive single sheets, can help cut costs," Mr Franks said.
``You can also save money on food if you are clever. For instance, turkeys go on special several days before Christmas."
Share costs
Large or extended families often find gift giving extremely expensive. The following Illawarra families have found that sharing costs can dramatically reduce the overall cost of gift giving, while ensuring everyone is happy.
``With 20 adults and six children in the O'Keefe extended family, the adults would all be working second jobs if they had to buy a present for everyone," Deborah said.
``Instead, about eight years ago the Official O'Keefe Christmas Draw was born, ensuring each adult only buys for one other adult.
``Every August, names are drawn out of a hat to match buyers with recipients.
``On the CDPI (the CD price index) the current present limit is $35. So every adult gets a present, and there's still enough cash and goodwill left over to make sure the kids fare pretty well."
Another Illawarra family cut out presents for the adults once each of the siblings started to have children, due to the overwhelming expense.
``Now that the family has grown to 10 grandchildren, the adults have decided to cut back again, with each couple being randomly matched to two of their nieces or nephews for whom they purchase gifts," Imogen said.
``It means the children, aged from newborn up to 12 years, receive only one present from all of their cousins, rather than the present frenzy of opening a gift and tossing it to one side to open the next (as little folk do).
``And instead of getting lots of little cheap presents that are more prone to breakage, the children receive a gift to the value of $45."
Do-it-yourself
Homemade presents are unique and often highly valued by recipients.
There are a number of craft magazines and books available offering step-by-step guides to making gifts, as well as a number of courses which are informative and fun.
For example, the Illawarra WEA spring 2000 course guide includes great options such as Silver Jewellery for Beginners; Lotions, Potions, and Decorative Bottles and Glass Painting, which will help you produce individual and thoughtful presents.
You can even learn how to make your own Christmas decorations with WEA's special Christmas courses, which include Christmas Creations and Heirloom Christmas Snowflakes.
While some, though not all of these have run their course - it may be worthwhile to check out next year's courses.
Ask for help
If you really are in dire straits this Christmas why not consider getting help from the wide number of charitable organisations in the region.
Organisations such as The Smith Family, The Salvation Army and Wollongong City Mission hold Christmas appeals for families doing it tough.
The Smith Family, for instance, gives out Christmas hampers stocked full of goodies to more than 2000 families in the Illawarra each year, according to development manager Chris Beaven.
``As well as the hampers, The Smith Family gives out a huge amount of toys to the region's disadvantaged families," Ms Beaven said. ``We are open right through the Christmas period so that if people do run into difficulties they have somewhere to turn."
Creditworthy is also a great place to turn for prevention or cure of financial difficulties.
``We can help people with a wide variety of financial services such as putting together a budget, restructuring their finances and negotiating repayment schemes," Mr Franks said.
© 2000 Illawarra Mercury
