First and foremost, avoiding debt is best achieved by not spending in the first place. While this is easier said than done, it's amazing how much stress you can avoid in the new year by changing your spending expectations. By reminding yourself of the true meaning of Christmas and educating your kids along the way, you can create a well-rounded holiday experience that is based on spending time together as well as spending money. When you do need to spend, you can stretch your budget by purchasing practical gifts, making home-made presents, and buying necessary things first before the budget gets out of control.

Setting a budget is crucial at this time of year, especially if you're the type of person who is prone to compulsive or impulsive spending. Christmas is a tempting season after all, and it doesn't take much for things to spiral out of control. It's important to set a budget for every aspect of Christmas, including gifts, food, alcohol, holidays, decorations, parties, and family entertainment. While lots of people are good at setting a budget for presents, other bills have the potential to be even bigger and need to be managed accordingly. Like many things in life, surviving Christmas debt is about being organised and setting limits that match your income and lifestyle. 

Paying for all of your Christmas expenses with cash can be a great way to avoid nasty surprises, with good old-fashioned money much easier to track than credit cards and ‘buy now, pay later’ retail offers. If you do need some extra money to get you through the holidays, it's important to be careful of how much you borrow and where it comes from. Be especially wary of 'payday lenders' who offer short term loans with very high interest rates, some of which can add 560 percent over a single year. While borrowing money from family and friends can be a good way to avoid interest charges, money can easily complicate and damage relationships if you're not careful. 

Credit cards are one of the most common ways to buy goods and generate short-term funds, with Kiwis having spent $36 billion on their credit cards in 2016 according to research agency Canstar. When you consider that 63 percent of this total incurred interest, it's easy to see how quickly things can get out of control. When Christmas is over and the hangover starts to take shape, it's important to take care of your financial responsibilities immediately. By making a financial plan and paying off whatever you can during the early days, you can avoid crippling interest rates and charges in the months ahead. If you do find yourself in trouble with creditors, it's important to work with someone who understands your situation and can show you a way out, such as the free personalised budgeting helpline 0508 BUDGET.

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