It’s beginning to look a lot like Christmas…and for many of us that means the annual juggling act between festive season spending and home loan repayments.
If a 2012 survey of Christmas spending by Rate City is anything to go by, Australians will collectively spend around $8.5 billion on Christmas gifts this year, and worryingly, around one in three of us will feel pressured to spend more than we can afford.
No one wants to be a Scrooge over the festive season but it’s simply not worth putting yourself under financial stress during what’s meant to be a fun time of year. Instead, try some simple planning to meet the needs of your home loan – and still enjoy a hearty Christmas.
Take a tip from Santa – make a list
Writing a list of your likely Christmas spending makes it easy to see exactly what you’re up against in terms of cash outflows. Include everything from gifts, food, decorations and alcohol through to transport expenses to gain a truly accurate picture.
Spreading purchases over a longer period can make the cost more manageable, so it’s worth stocking up on Christmas goodies now. There’s still time to use lay by for big ticket purchases, and unlike using a credit card there’s no risk of additional interest charges.
Trim spending not the trimmings
If it looks as though you could face a cash squeeze over Christmas, rethink your spending list looking for ways to cut back. A merry Christmas doesn’t have to be expensive, and simple steps like pooling with family members to buy combined gifts won’t make the festive season any less special.
Give your home loan top billing
The key thing is to make home loan repayments your top priority. Stretching your finances to the point where you have to skip a month’s repayment won’t just add to your stress levels, it will make it harder to get ahead in the New Year.
The thing is, your loan could even help you manage the cost of Christmas.
If you’re ahead with your mortgage, you may have the option of utilising those extra payments through your redraw facility. Or give yourself the luxury of sticking to the minimum monthly payment just for December.
Speak with your lender
If it still looks as though things could be tight over the festive season, speak to your lender. You may be able to negotiate an alternative payment option. Some lenders offer repayment holidays and while this offers breathing space bear in mind that loan interest will continue to accrue.
Importantly, don’t simply miss a repayment. Your good repayment record is a valuable asset – one worth keeping intact long after the festive season has ended.