'Tis the season to be frugal

Christmas across Australia could be looking a little more modest this year with households choosing to fill their savings accounts over their Christmas stockings.

An annual Consumer Sentiment Survey conducted by Mortgage Choice has found many Australians are aiming to be more sensible with their Christmas spending this season, avoiding to splurge unnecessarily and even planning to contribute towards other goals such as paying off their credit cards, home loans and contributing to their savings.

"We all know that December and January can be very expensive months so it is pleasing to see many Australians  planning ahead to spend sensibly an the festive season and start the New Year without any financial hangover," said Belinda Williamson, Mortgage Choice Head of Corporate Affairs.

Retailers on the other hand are hoping that consumers say one thing and do another. In a recent survey by Deloitte Access Economics of retail executives, 70 percent believe that this year's Christmas spending will be higher than last year. This forecast is on the back of improved consumer confidence, interest rate cuts, solid wages growth and house prices stabilising.

It won't be the Christmas of their dreams for retailers, Deloitte partner David Rumbens has stated in the company's latest quarterly retail forecast report.

"But it may provide them with a vital ingredient which has been missing over the previous two years - decent cash flow."

Those planning on a financially sensible festive season should also look to their bank account interest rates to contribute to their savings goals. Those who compare savings accounts with market leading interest rates could add to their Christmas savings significantly.

Have a question about savings accounts? Ask the gurus at Mozo Answers.