While it’s the season of increased expenses, Christmas does not have to derail your finances if you plan ahead.

Good budgeting practices, matched with forward-thinking financial planning, can help homeowners enter the New Year free of burdensome credit card debt and other excessive financial commitments.

But if extra cash is required to cover a Christmas shortfall, The Mortgage Gallery’s Managing Director, Ryan Dhue suggests unlocking some of the equity in your home rather than using a credit card.

“It’s very tempting to splurge during the festive period,” says Dhue. “Whether it’s a gift for the kids or hosting parties throughout the holidays, overspending can drastically affect your finances – making it hard when January comes around and bills are due.”

Dhue advises prudent use of the credit card over the Christmas and holiday period for those looking to curb their expenses, particularly if they’re already juggling a mortgage or experiencing problems meeting monthly mortgage commitments.

“Charging your purchases on your credit can make it easy for you to lose track of how much you’ve spent,” says Dhue. “Remember, your credit card typically has a high interest rate, which means the interest incurred on purchases can quickly add up.”

According to Dhue, one of the easiest ways to prevent a holiday debt hangover is to set a spending limit as early as possible.

“Start with a simple plan detailing how much you can afford to spend, and make the effort to stick to the plan,” he says. “Once you’ve established your budget, detail your commitments – such as gifts for families and friends – and allocate costs to each item.”

“Keeping your finances under control over Christmas may be as simple as spending a little less on each present.”

But if you do find yourself short of cash, Dhue suggests alternatives to using your credit card.

“If you own a home, accessing extra funds through your loan can be a sound alternative since it can offer drastically reduced interest rates when compared to your credit card,” he says.

While using the equity locked in your home can help you access funds over Christmas, Tyers reminds borrowers to assess their ability to manage any additional repayments before taking on more debt.

“Any debt incurred over the Charismas period will need to be repaid, regardless of whether it’s on your credit card or drawn out of your home.”

“The important thing to remember is to stick to your budget, keep spending under control and be prepared to meet any repayment obligations,” he says.

If you’d like more information managing your financial commitments over Christmas, as well as the solutions available, give The Mortgage Gallery a call at 1300 888 839.

The Mortgage Gallery was recently identified by BRW Magazine as Australia’s fastest growing financial franchise.  The Mortgage Gallery was established in 1992 and has assisted thousands of Australians source the most appropriate financing for their needs, supported by over 30 different lenders.