June 21, 2019 | 02:22 AM

Get Out of Debt

31.07.2018How families can avoid borrowing too much over winter

Some people experience the same financial pressures throughout the entire year. But for many households, winter is by far the most expensive time.

When it comes to borrowing, it often seems like there’s a reason to take out a loan or max out the credit card no matter what the season. Some people experience the same financial pressures throughout the entire year. But for many households, winter is by far the most expensive time. The cost of family holidays can easily mount up, and it’s also a busy time for the budget thanks to school holidays and childcare. For most families, household debt skyrockets around this time as they deal with these expenses. Luckily, there are ways that parents can manage these common cost pressures.

Have a staycation

Winter is the coldest time of year for Australians – and while it’s still pretty warm here, there’s plenty of temptation to head off to sunnier climes. But because of Australia’s relative geographic isolation even from the rest of the Asia-Pacific region, it’s sometimes difficult to nab a travel bargain. Once four-figure plane tickets for a whole family or a stay in an all-inclusive hotel are factored in, it can sometimes seem as though there are endless costs to incur.

A temporary solution to this problem is to put as much of the spending as possible on a credit card. But the tendency to do this could explain why Australia has among the highest levels of personal debt in the world. Another, more practical approach is to be savvier about holiday plans and stay within an affordable budget. Rather than heading abroad to a location like Bali, for example, why not visit a local area instead? The Australian state capitals are packed with plenty of free or cheap experiences which kids will remember – and for those who live rurally, a trip to the nearest big city will be a source of excitement in itself.

Plan childcare in advance

Parts of the Australian winter coincide with the July school holidays, so there’s often an increased demand for childcare at this time of year. For families in which both parents work full-time, the cost of childcare is often extremely large. In fact, sometimes the only option when it comes to settling the bill for the nanny or the nursery is to put it on credit. But instead of hiring childcare every day, why not think creatively and look for cheaper options? Parents could consider asking friends and neighbours, for example, or they could approach student nieces and nephews who are home from university to do it cheaply in exchange for some spending money.

Fun activities at home 

For a family where one or both parents are going to be at home with the kids over the winter months, there are all kinds of things to be done here in Australia to keep them entertained without having to reach for the credit card. For example, instead of a movie trip once a week with popcorn and drinks, why not cut down the number of family cinema outings and recreate the experience at home with Netflix? When the kids have control over what to watch, they won’t mind for a second that they’re not at the movies.

Understandably, winter isn’t the best time of the financial year for everyone. When families are pressed for cash, they may find themselves turning to credit cards and payday loans in order to cover everything from childcare costs to holiday funds. But while these solutions ease the pain in the short term, they only exacerbate it over the long run. By sticking to the tips outlined here, it’s possible for those who feel pushed into spending more during these months to cut back and find a way to manage the season without getting into debt.

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