I’ve come across research showing one in three Australians spend more than they can afford during the holiday season, and that’s a real worry for families, who can be left cash-strapped in the New Year.
Perhaps this explains why 31% of us plan to cut corners on presents this year, with one in six people scrapping gift giving altogether according to research by Finder.
Skip unnecessary costs
At a time of year when our wallets get lighter as gift lists get longer, it pays to avoid unnecessary costs.
If you’re buying big ticket items like appliances and electricals, be prepared for the retailer to try and sell you an extended warranty. The cost will vary depending on the product but consumer groups say extended warranties can be an unnecessary extra.
Under Australian consumer law, you already have extensive rights to a refund, repair or replacement. So don’t be pressured into purchasing extended warranties you don’t need. Do hold onto your sales docket though for proof of purchase if something goes wrong with the item.
Be selective with online shopping
If you’re heading online for your Christmas shopping, take a bit of extra care. Australians spend an average of $58 each week online, and chances are this figure will skyrocket over weeks ahead.
The internet is extremely handy when it comes to comparing prices and tracking down bargains. But in the pre-Christmas rush it’s easy to lose money to a dodgy website, especially if you haven’t used the provider before.
Always look for security features, like website addresses beginning with ‘https’, that show your payment details should be safe. And if you come across an advertised price that seems too good to be true, chances are it probably is.
Online reviews of different suppliers are a great way to gauge the sort of quality you’re buying before parting with your money – as well as highlighting potential problems if you need to return or exchange purchases.
When it comes to cyber shopping, don’t forget to make allowances for delivery fees – they can quickly add up. Buying the bulk of purchases from a single store is one way to reduce shipping costs.
Okay, that’s enough of me being Scrooge, have a very merry Christmas!
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
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