Three months ’til Christmas!

Hark! Those angels are going to sing whether we’re ready or not.

At the moment it may be hard to hear them – Christmas is close to three months away. One thing’s for sure, though: however you celebrate that beautiful time of year, it will be here before we know it.

So what can we do ahead of time before we ring it all in? The goal is to avoid as much high-interest credit card debt as possible (and that “morning after” headache that comes in late January when you see your statement). That’s the sort of debt that’s a drag on your finances and makes it harder to get ahead.

Interest rates for credit cards and their even-more-costly cousins, store cards, have remained stubbornly high, despite plunging interest rates everywhere else. That money is expensive!

The Reserve Bank reported last week that New Zealanders are still carrying credit card balances of close to four billion dollars that we get charged interest on. And at an average interest rate of 17.8%, that means we all paid around $58,932,833 in interest – in just a month.

How many Christmases could we fund with that money we’re paying? And New Year’s, and holidays? I’m sure each one of us could come up with some great alternatives.

So before we resort to the cards again, let’s see where else the money can come from. If you’re paid monthly, you’ll have three pays to save from before Christmas. If it’s fortnightly for you, that’s six pay cheques to go.

Even if you’re living on your credit card – or even still paying for last year’s Christmas – here’s your chance to give yourself and your family a gift this year and do things a bit differently.

It’s been shown time and again that the trick to saving is to pay yourself first each time your pay rolls in. This doesn’t mean plucking a number out of thin air, but rather checking your run rate to see how much extra you can save. Then, before you pay anything or anybody else, give that surplus money its Christmas job.

Since automatic payments take all of 10 minutes to set up online these days, paying yourself first has never been easier. An AP to your holiday account each payday means you won’t even miss that money.

The more you can get on the front foot the better. And by the time St Nick needs to roll out the sleigh, you’ll be ready.