Puppies are for life, not for Christmas, and that’s how you should look at all your Christmas spending
Christmas is coming and by now you’ll be inundated with tinsel music, shops full of tat you don’t really want to buy, neighbours telling you to put up more decorations or take down more decorations and of course, The List.
We all have a The List. Who we have to buy presents for.
If you’re organised, The List will be a spreadsheet with last year’s gifts both to and from said recipients and estimated value of same. There might even be a scatter graph and possibly some ideas as to what hints they’ve dropped throughout the year.
My The List does not look like that. Oh to be so organised.
Mine consists of names (Mum, Dad, Kid, Other Kid, Oh god don’t forget the wife REALLY THIS TIME, Mother in law, Father in law, Sister in law, Brother, Nephew, Niece, Mad Aunty) and a lot of question marks. It’s a work in progress.
One thing is for sure, however. Most of us will end up putting Christmas on the credit card and that is something that, like the gift of a puppy, might not be just for Christmas.
Credit cards are a great way of shopping, as most of us know. You can buy things outright and, if you pay off your card each month by the due date, there’s no interest to pay. It’s a lovely idea but of course, credit card companies aren’t here just to make our lives easier. They’re here to make money and so they rely on people like you and me spending too much and not being able to pay off the card at the end of the month. Then they charge interest.
It’s not quite Tony Soprano “breaking your legs” levels of interest but it’s still high.
If you’re smart you’ll tack on that interest to the price you’ve got in your head when you’re buying these gifts in the first place, but we rarely do that so we tend to look at the ticket price as the actual price and it goes no further. Sadly, the interest does go further because of course if you don’t pay all the interest this month, next month you’ll pay interest on that interest as well as the original amount and your $500 gift can swiftly blow out to being a much more expensive proposition.
So what can you do instead of incurring credit card costs? There’s layby and hire purchase but both can add on penalties and payments that you’re not expecting, and the final price is often a lot higher than paying cash up front. If you can, be like my Nanna and plan ahead. Start thinking about next Christmas now (no, really) and do some shopping in the January sales. She taught me well, my Nan.
There is good news, though. Most New Zealanders do put Christmas on the credit card but by February credit card debt levels have returned to pre-Christmas levels, which means hopefully that most of us are shopping smarter than we’re lead to believe. If you’re one of those well-organised folk then congratulations and keep up the good work. If you’re less well-organised like me, keep on aiming for that golden Christmas where you pay what you should pay for the pressies and Christmas is a time of cheer and joy rather than debt and recrimination.
And if you are getting someone a puppy, pro-tip: do consider air holes before wrapping it.
Credit Simple gives all Kiwis free access to their credit score, as well as their detailed credit report. See how your credit score compares by age, gender and community and gain valuable insights into what it all means.All stories by: Credit Simple