Shopping Smart:

• (See Tips for Grocery shopping hints)
• Hire Purchase and Buying on Credit
  Most people buy something on credit at some stage of their lives.
• Hire Purchase is a convenient way to have the item and use it while still paying it off. But it does have its disadvantages. Here are some ways to minimize getting into trouble with Hire Purchase (HP).
• Only have one HP at a time. Pay it right off before you consider entering in to another HP arrangement.
• Try to pay a deposit – as large as possible – on your item. You’ll pay it off much faster.
• Look for hidden costs in “no interest” deals. These are by far the best way to use HP, but be sure that the shops will be making their money somehow! If you have your own contents insurance, you don’t have to pay insurance costs on the item. You will probably still have to pay a financial “set-up” fee.
• Some HP statements are confusing. They give you a monthly amount to pay, but if you read the fine print, you’ll find that if you only pay that amount, you won’t pay off the item before the interest-free term runs out. So, you’ll end up paying interest (and the rate is usually quite high) on the remaining balance. Work out with a calculator what you need to pay in order pay off the item within the interest free term:
• Take the full amount of purchase (include any finance fees, such as set-up fees, insurance etc)

• Divide it by the amount of interest-free months the deal gives you (for example, a 2-year interest free deal = 24 months)

• This is the amount you need to pay every month – which may not be the amount on the statement.

Layby:

• Laybe can be a useful way of setting aside items for a special occasion (eg birthdays or Christmas). This way, the shop keeps the item until it’s paid in full. This can be a good incentive. Most shops have a limited amount of time to pay off the goods – often 3 – 4 months. It can be useful to buy Christmas presents on lay-by, perhaps when the shops have a good deal going.

• Be wary of over-committing yourself to laybys. Work out your budget on the easy worksheet to see what is available in the “presents” column. You may wish to use some of this for layby purchases.

Budgeting for Christmas and Birthdays:

• Every year people going on a spending frenzy at Christmas. Can this be avoided?
• Here are a few suggestions:
• Plan ahead! Set aside a specific amount for birthdays and Christmas. Announce to the family that you will only be spending $x amount on each person this year and stick to it!

• Some families only buy for certain members of the extended family at Christmas. The person is determined by drawing names out of a hat. This way everybody only buys for 1 person, rather than dozens. A spending limit is also useful.

• Buy early in the year for Christmas. Some people buy next Christmas’ gifts at the January sales! Or, as you see suitable presents during the year, buy them, so you don’t have a panicked last-minute buying spree.

• Buy Christmas vouchers during the year at the supermarket. These are usually great value, and it means you have extra money for the special foods and treats associated with Christmas. Buying this way is far more cost effective than some Christmas Hamper promotions that you contribute money to during the year. The hampers you receive at Christmas are usually not worth the money you’ve put in during the year. Purchasing coupons at your own grocery store means you buy exactly what you want, and at supermarket prices.

• Birthday presents could be paid off as laybys. You don’t pay extra costs and it means that you can plan ahead.