Ho, ho, ho. ‘Tis the season to spend, but it doesn’t have to harm your credit health. 

Do you overspend in the festive seasons? Discover ways to have an epic holiday without blowing your budget. 

Strategies to stay on track during the festive season

New research suggests that many Australians began their Christmas shopping early this year

Two out of three (63 percent) of Aussies stated that they intended to purchase gifts  starting in September with shopping expected to accelerate in October through to December. This research was conducted by global advertising technology leader The Trade Desk with YouGov1.

Three in four (76 percent) of Australians planned to spend the same or more on gifts as they did in 2020, with online shopping also tipped to increase; 41 percent of online shoppers said they intended to make more purchases online this year. 

News headlines about supply chain issues may have played a role in our early planning. The question is, did you also plan for the effect that festive saving may have on your finances and credit health? 

Here’re some smart ways to have a fab, fun festive season while avoiding a debt hangover that could impact your credit score.  

Avoid buying gifts on credit 

It feels great to lavish gifts on your loved ones during the holidays. Unfortunately, when these costs are charged to credit cards, the debt hangover can linger for months once you factor in interest. Try purchasing gifts using cash or your debit card, rather than your credit card or Buy Now Pay Later services, which can impact your credit score and avoid spiralling debt. 

Feeling super organised? Set up a dedicated holiday account and deposit the funds you’ve budgeted for the season in it. Then, use this account, for all your festive purchases, whether you’re shopping online or withdrawing cash to hit the shops.

Set your budget 

Calculating what you can afford to spend ahead of the hectic holiday rush is a great way to avoid budget blow out. Set aside some time to work out your budget, starting with the big-ticket items (major gifts or holiday accommodation or flights) and working all the way through to gifts, decorations, food, and entertainment. 

There are many online tools that can help you create a budget, and then it’s a matter of tracking what you spend – write it down in a notebook or spreadsheet, track it through your online banking, or use one of the many free or paid spender tracker and money management apps available to download on the App store and Google Play.

Top up your credit card

Paying down your existing debt as much as possible now will help take the sting out of any unavoidable post-holiday debt. If possible, make extra payments by prioritising your debt above other discretionary spending to help bring it back down to zero balance. While you’re at it, check out these smart ways to get out of debt faster.

Pay your bills first

Remember that paying your bills on time is one of the positive credit behaviours that can help you improve your credit score. If you haven’t done so already, set up automatic bill payments and make sure your essential bills are paid before you do any holiday shopping.

Resist impulse spending 

It’s easy to get caught up in the spirit of the season and overspend, especially when you’ve enjoyed a festive spirit or two. Make a firm pact with yourself now that you’ll think about any purchase that costs more than $100 for at least 24 hours before committing, particularly if it’s not in the holiday budget.

Shop online and search for sales

Avoiding impulse buys can also be easier from behind the safety of your computer. Arm yourself with a list of exactly what you’re looking for and then go in search of bargains online.

Boxing day sales can trigger FOMO. To avoid this, only stick to items that you would have purchased anyway rather than buying something just because it is discounted. Remember, there will always be another sale. 

Hack your gift list

Get creative and think outside the (overpriced) gift box. Think quality not quantity, handmade over purchased, and clever ways to give your loved ones something thoughtful that doesn’t cost the earth, such as DIY vouchers for cleaning, meals or baby-sitting services. Scouring second-hand stores can also unearth bargain gems.

A good credit score has many benefits, so don’t let holiday overspending affect yours.


1 - New research reveals almost two in three Aussies will shop early for Christmas this year. November 2, 2021. https://www.thetradedesk.com/us/press-room/new-research-reveals-almost-two-in-three-aussies-will-shop-for-christmas-early-this-year. The survey was conducted online by YouGov amongst a nationally representative sample of 1,043 Australian adults aged 18 and over, between 2 - 6 September 2021. All data was weighted by age, gender, and region to reflect the latest Australian Bureau of Statistics population estimates.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.