Set a Christmas budget - and stick to it

Consumer Affairs Minister Judith Tizard wants consumers to have a peaceful and enjoyable time at Christmas and over the holidays, but she also wants to remind people to be careful about paying for it well into the New Year.

"It's a festive time but we need to be careful not to spend too much," said Judith Tizard. "Paying for Christmas and holidays sometimes lasts well into the New Year and beyond, especially if we use our credit cards.

"Work and family commitments often mean Christmas shopping is done in a rush. We can also find that we spend a bit more than we intended to while on holiday. Many Christmas purchases are put on credit cards rather than using cash or lay-by.

"This means that consumers can end up dealing with a large credit card debt in the New Year - at a time when we are also hit with bills for school uniforms and fees, power, telephone, rent or home loans."

Consumers can also be tempted by offers of interest-free deals to purchase items with no payments until later next year. "These hire purchase offers may sound good now but might not be so tempting when payments are due later in the New Year.

"Statistics show that levels of household debt in New Zealand are increasing rapidly while levels of saving are dropping," said Judith Tizard.

"Christmas and the holiday season is a time when many consumers fall into the trap of spending more money than they intended, which can reduce their choices over the rest of the year.

"Often the greatest gift we can give our families is our time and our love."

Here are some tips to avoid getting into debt over Christmas, New Year and the holidays:

- Set a budget for Christmas spending and stick to it.

- Pay for presents using cash or lay-by rather than credit cards.

- Talk to your family and friends about putting a limit on the amount spent on presents or about deciding to buy one present for one other person, rather than everyone.

- Make a shopping list of the people you need to buy presents for and write down the amount of money you can afford to allocate next to each name.

- Give yourself time to shop - don't end up rushing around at the last minute buying whatever you can get your hands on.

- Consider opening a Christmas savings account so that you'll be better prepared next year - even if you only put in $10 per week, you'll have over $500 by next Christmas.

- If you must use the plastic, use just one card and plan to have all of the festive season expenses paid off within three months.

- Seek budget-planning advice.

ENDS

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