Christmas finance countdown: Getting personal finances in order for the festive season

• With only 100 days until Christmas now is the time to get on top of your debt and plan your festive finances 
• Mozo’s database currently has 74 balance transfer cards with a 0% transfer fee with savings up to $629 over 12 months on offer by transferring a $4,200 credit card debt
• Mozo’s research found just over half (51%) said they find their Buy Now Pay Later debt a financial strain so now’s the time to tackle it
• With the industry research showing 35 to 49 year olds set to spend $726 on average this Christmas, Mozo found by depositing $60.50 a week into a savings account you could achieve this balance two weeks before Christmas
• Consider taking control of your finances and budgeting for your Christmas purchases using an open banking app such as Frollo

With only 100 days until Christmas Mozo has come up with a number of tips and tricks that could help you get on top of your debt and plan your purchases heading into the festive season. 

“Many Aussies have gone into debt on a credit card or racked up a Buy Now Pay Later debt this year as they shopped online through lockdowns, but with Christmas fast approaching now is the time to tackle it,” says Mozo spokesperson, Tom Godfrey.

Tackling credit card debt

When it comes to credit cards, the latest RBA figures show our national credit card debt is topping $20 billion, but the good news is if you act now you could put yourself in a better financial position before the sleigh bells start ringing. 

Mozo’s database currently has 74 balance transfer cards with a 0% transfer fee and of those 50 have no establishment fee. Mozo found that if you’re carrying a $4,200 balance forward on a credit card with an average interest rate of 17% by taking advantage of a 0% balance transfer offer, you could save $157 before Santa pays a visit and $629 over 12 months. 

“Taking advantage of a credit card balance transfer offer might be a good way to get on top of your debt but it’s important to continue to pay the balance down and be disciplined with your spending as the festive season approaches,” Godfrey says.

Pay down your Buy Now Pay Later balance

Buy Now Pay Later services are booming with Mozo research finding 66% of Australians now have an account. Worryingly, it also found just over half (51%) said they find their Buy Now Pay Later debt a financial strain.  

“With 100 days until Christmas, there’s still plenty of time to pay down your Buy Now Pay Later balance and put yourself in a good position to take advantage of the pre-Christmas sales,” says Godfrey.

Start saving now for Christmas

With the latest industry research finding 35-49-year-olds are expected to spend an average of $726 each on gifts this year, now is a good time to start putting some money aside in a savings account to prepare for the peak retail season. By depositing $60.50 a week into a savings account you could achieve this balance two weeks before Christmas, leaving you time to complete your Christmas shopping and make the most of sales. 

“Putting a little money aside each week in a savings account could be a good way to help  cover the cost of Christmas without putting the family finances under pressure,” Godfrey says.

See if a budgeting app can help you get on top of your finances

With many of us keeping our money in different places, it can be challenging tracking your expenditure across various banking and finance products. Open banking apps such as Frollo let you sync up your various accounts so your transactions are automatically categorised in one place. You can also use them to set up and manage a Christmas budget to help ensure you’re not under financial pressure when the tinsel is packed away.  

“Although the big four banks have been slow to embrace open banking, you don’t have to be. Using a budgeting app that allows you to see all your accounts and transactions in one place, can be a good way to see your overall financial position as we head towards Christmas,” says Godfrey.

Festive Finance Tips:

• Start planning your Christmas purchases now and keep an eye out for pre-Christmas sales
• Consider a 0% balance transfer offer to help you pay down your credit card debt. You can also use an online calculator to work out how quickly you can pay off your debt
• Pay down your Buy Now Pay Later balance before the peak retail season arrives  
• Set up a Christmas present savings plan and see if you can bank a little interest along the way 
• Consider taking control of your finances and budgeting for your Christmas purchases using an open banking app such as Frollo

-ENDS-

Notes: Mozo compared the cost of paying off the expected July credit card debt of $4,200 using 0% balance transfer cards with the cost of a card with the average interest rate of 17%. Mozo assumed the debt was paid off in full in equal monthly repayments during the 0% period and there was no additional spending and included balance transfer fees, annual fees, and introductory annual fee waivers in calculations. Compared against paying off the existing debt on the “average” CC (17% purchase rate, $120 annual fee). Reserve Bank of Australia data was used to calculate National credit card debt accruing interest. from ‘Credit and Charge Cards - Original series - Personal and Commercial Cards. Christmas and New Year Period debt statistics were determined by a nationally representative survey commissioned by Mozo of 1,366 Australians conducted by Researchify between 2 January 2021 - 10 January 2021. Christmas present spending statistics from Australian Retailers Association (ARA) and Roy Morgan - Count Down To Christmas