Get Sorted: 'Twas the month before...

The goal is to get through the Christmas season without racking up dumb debt. Photo / Thinkstock

Steer clear of dumb debt this season – and the more tidings of comfort and joy there’ll be for the rest of the year.

When it comes to Christmas, I'm always late to the party. It takes me a while to get that spirit.

One reason is that our almost-seven and almost-nine-year-old boys both have their birthdays a couple of weeks apart just before the holidays hit. Celebrating their birthdays makes it challenging to get more gifts for them under the tree so soon after. I typically can't even think about giving Santa a hand until about 15 December.

All of that last-minuteness makes it hard on the wallet. The goal is to get through the season without racking up dumb debt. The more we avoid this, the more joyful the rest of the year becomes.

Now the 'dumb' in 'dumb debt' is not about those of us carrying it on our cards; it's about a certain kind of debt - high-interest borrowing that could have been avoided. Interest rates on many credit cards these days have started to creep above 20 per cent, so leaving $900 on your card for nine months, for example, ends up costing you $1,000 instead. Ouch.

Low weekly payments are on display everywhere in the run up to Christmas, anchoring our minds to those low figures and keeping us from considering how much the total cost will be.

The upside is that the giving season predictably comes around every year, so we all get the chance to try something different as we finance the festivities. So the question is, what are we doing better this year with our money? How much Christmas are we getting out of what we spend?

Now I thought I was getting on top of the whole Christmas thing this year by buying my partner a gift early - but I ended up giving it to her right away instead of waiting! So it probably had the opposite effect moneywise.

But with a month to go before Christmas, I still have time to get it right.

Get Sorted is written by Sorted's resident blogger, Tom Hartmann. Check out the guides and calculators at Sorted - brought to you by the Commission for Financial Literacy and Retirement Income - at sorted.org.nz.