Lets think about the chain of events. Its been a huge year for everyone. Work, pre-school, school, study, homework, sports, events, and so much driving. All of a sudden the Melbourne Cup is on our doorstep – November is unofficially the start of party season in Australia. How does the calendar look in the lead up to Christmas?

Christmas is such a busy time. Planning the holiday. Buying the gifts. Entertaining the family and friends. Entertaining the kids (and their tribe of friends) on school holidays. Feeding the masses! Do we plan for this time financially? The answer is – in the majority of households – no.

If there is no planning, how do families survive the ride through Christmas? Our observations show a tremendous increase in the use of credit cards, and mortgage offset drawings during this time of year. There is a definite sense of “get it now, deal with the consequences later”. This leaves families in a situation where they spend the first 3 to 6 months of the new year recovering from the impact of Christmas. Obviously this doesn’t leave much time before the next Christmas rolls around! And so the cycle continues.

So how do we fix this situation? The answer lies in understanding your personal financial affairs. Tracking your household cash in, and cash out, to see a clear picture of savings. Treat your personal family life like a business. Your Christmas expenses each have their own category. For example – Holidays, Gifts, Kids Activities, Entertainment.

After expenses, you should have a positive “profit”, otherwise known as “surplus” to direct towards your investments. If this figure is negative, it is clear that you are reaching for credit cards and debt to fund your lifestyle.

It is remarkable the change we see in families who embrace this concept and take control of their financial position. Your situation can be improved by bringing in alternative income streams, and pulling back on expenses that are unnecessary. Until you can accurately identify your actual personal income and expenses, you will always be spending on things without knowing if they are affordable at that point in time.

Don’t let another year go by dealing with financial stress of Christmas on your family. Plan well in advance. Embrace the new year with a positive position. Enjoy the Festive Season!