You may still be recovering from Christmas festivities, whether eating and drinking less or getting to the gym. But how is your credit card balance?
Finder.com.au analysed data from the Reserve Bank of Australia (RBA) and found that Australians have an average of $1,863 in holiday credit card debt. And a year from now, 27 per cent of Aussies will still be paying off debt from Christmas 2018. Across the country, almost $30 billion was put on credit cards this holiday season.
Before you start running for the hills, let's take a look at some saving strategies that will help you pay off your holiday financial hangover.
1. Set up a budget
Easier said than done, right? But if you've never attempted to set up a strict budget for yourself, it's time to start. First, take a look at your spending habits. Review your bank statements from the past month, and analyse your cash flow.
Think about things you can cut out or at least reduce. Once you understand where most of your spending is happening, you can start to reorganise what you're buying. You may rethink purchasing every item that catches your eye.
2. Get food costs under control
Eating at restaurants is a big expense that's easy to turn around. Make a plan to grocery shop every week so you won't be tempted to go out for dinner. Bring your lunch to work. Make coffee at home instead of stopping at the cafe on your commute.
If one of your biggest joys in life is going to cafes and restaurants, give yourself a day or two each month when you can still enjoy these outlets. Just don't do it all the time, and you can save hundreds of dollars a month.
3. Cut back on luxuries
Hard workers like to play hard, too. But if you have hundreds of dollars left to pay off on your credit card, it's time to cut back on luxuries for a while.
Instead of getting bi-weekly manicures, treat yourself to one every couple of months. Don't pay for the most expensive yoga class. Buy the cheaper bottle of wine.
Also take a look at all the subscriptions you're paying for. Whether audio or video streaming services or online newspapers, make sure you're actually using those services. Ten bucks a month may seem small, but over a year you could put that $120 toward your debt.
Once you start to cut back, you'll be on the road to debt freedom in no time.
Get in touch with our team at Bloom Lending Services for more budgeting tips.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.