All I Want for Christmas

December is all about Christmas and all that comes with it: the presents you need to buy – oops, don’t blow the credit card – the cards you need to send and the preparations you need to do before that mob of family converges. It’s also a time where you’re hit with “Christmas gift idea” lists everywhere you turn, which might otherwise be known as: ‘ways to buy into the high spend mentality and really make sure you max your credit card’. So to counter those traditional December spend-up-big-on-gift slogans, we’ve come up with some ideas for savvy Christmas gifts – not just for your nephew or your cousin – but things that will put a smile on your face as well.

Savings Account

What better gift could you give than launching a young relative’s knowledge of financial literacy and saving. Even if you only start them off with $50 in an account, you can top it up for successive birthdays and Christmases and really take a role in showing them how the interest grows over time and encourage them to make their own contributions to the account. Make sure you select an account with a high interest rate, and do some research as there are often bonus saver accounts for children with special perks and incentives.

Credit Card

Why not, this Christmas, do something completely different to every other Christmas that’s gone before and make a deal with yourself to rein credit card spending in tighter than Rudolf. Instead of tossing the card about with frivolous festive abandon, sit down and make a plan for how you can keep things under control. Just tuning in to consider ways of reducing your spending will help this process eventuate. Maybe leave your credit card at home when you’re heading out to curb that spontaneous spend spurred on by the Christmas carol muzak, or work out ways to do Christmas food ordering in bulk with friends or at markets so you can save. A little bit of fore planning will take you far in this quest.

Extra bonus points: savings account and credit card

To give you extra incentive to reduce your credit card spend, why not set yourself up a savings account with a special goal in mind (something like a mid-year Winter escape holiday or other such aspirational treat) – and kick start it by putting in all the money you saved by not going crazy on your credit card. Just compare last December’s credit card spend to this year’s and celebrate the difference with a savings account gift to yourself.

Personal loan

We know December can be a busy time, but with two interest rate cuts in the past two months, it’s worth doing some research to see if you can reduce the interest rate you’re paying on any personal loans you might have. This might simply involve a phone call to your lender, to ask them to drop the rate by 0.5% to match the cash rate cut or it could involve refinancing for a better deal. Whatever you do, ask yourself and then your lender some questions to get the ball rolling.

Another sweet Christmas gift to yourself, which is a slight variation on the extra bonus points savings account idea, above, is to channel the savings you make on your credit card this year towards paying off your personal loan, so you can start 2012 with an even lighter load than you expected.

Home Loan

One way to get amongst the Christmas cheer is to make sure you’re making the most of the ho-ho-home loan interest rate cut. Yes, the Reserve Bank has come out and dished up the finest gift any mortgage-holder could ask for – a second successive cut in the interest rate, which has seen the cash rate fall from 4.75% to 4.25% since the start of November. So while the big banks haven’t shared the love with their customers by matching this latest rate cut, there are many other lenders out there who are wanting to help you celebrate Christmas, so now is truly the time to look into your options and make a switch that could end up saving you thousands if not tens of thousands of dollars.

Merry Christmas to all of you. We wish you a prosperous and profitable December and hope you have fun connecting with all those things that the festive season offers that won’t cost you much more than a penny: taking the opportunity to share time with friends and family; enjoying the smell of the pine needles of the Christmas trees; feeling the optimism of the long summer nights; and watching the look on kids’ faces as this time of year leaps into their imagination. There’s so many things that we can enjoy without making it all about the ka-ching of the cash register.