Enjoy a happy financial Christmas

I RECKON Christmas offers a wonderful opportunity to get together with mates and family, but it can see us dipping into our wallets more than usual.

The Commonwealth Bank is forecasting the average Australian will spend an extra $1,079 between the start of December 2014 and early January 2015. Most of this money will go towards gifts and vacations.

That's a lot of additional cash, and according to ING DIRECT research, about one in four households will lighten the financial load by re-gifting unwanted presents.

That may mean it's only a matter of time before the home brew kit you buy for great-aunt Ethel finds its way into your own Christmas stocking next year (not a bad result, actually).  

However, the same study shows that plenty of people - almost one in three of us, will still be rushing to the shops for last minute gift purchases on Christmas Eve. It's at a time like this that we can be tempted into impulse buys, or worse, dodgy deals.

In particular, consumer group Choice is warning about cash back offers, which fair trading bodies across the country have found to be a problem area.

Cash back deals involve retailers offering to return part of the purchase price of an item rather than offering an upfront discount. The deals can sound very rewarding. The downside is that there are usually plenty of strings attached.

Choice says shoppers may not always be able to get their cash back thanks to strict time limits on making a claim combined with tricky terms and conditions.

In fact, it's estimated that around 70% of people don't even try to claim the cash back on these deals. Among those that do, some find the 'cash returned' is in fact a gift card - not quite the same thing as cash at all.

If you're tempted by a cash back offer, be sure to read the terms and conditions so that you are confident you can tick all the boxes when it comes to making a claim.

And don't expect a cheque in the mail instantly. Work colleagues who have accepted these offers say it can take months to see the colour of a retailer's money.

Without wanting to sound like the Grinch, it makes sense to avoid letting festive season bonhomie dictate your Christmas shopping patterns. Instead, try taking a leaf out of Santa's book - make a list of items you need to buy and check it twice.

Give yourself plenty of time for shopping. A last minute rush almost always means spending more than you planned, or buying something dud. Or, consider pitching in as a group for big ticket items for friends and family.

Importantly, remember to allow sufficient cash to cover regular expenses like your home loan, rent or other household bills over the Christmas period.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.


Community project unveiled

Community project unveiled

The Clermont Peace Pole project has officially opened to the public.

Business success buoys Emerald property market

Business success buoys Emerald property market

Real estate agent is seeing confidence back in Central Queensland.

Rallying against cancer

Rallying against cancer

An Emerald couple are set for the adventure of a lifetime.

Local Partners