COMMENT:

Are the ghosts of holiday spending haunting you?

Acting Retirement Commissioner Peter Cordtz was horrified when a pamphlet landed in his letterbox at the beginning with the words: "Tis the season to entertain now and pay later". The well-known store promised 90 days' interest free credit on all purchases up to December 24. Many of those who took up the offer would already be saddled with consumer debt.

"Despite our best efforts to warn people about this type of risk, we know a lot of Kiwis will be rolling into 2019 saddled with their existing debt and other new debt," he says.

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But your past doesn't need to define the future, says Joanne Hurford, service manager at the Pakuranga and Howick Budgeting Service.

"All that's needed is taking the first step forward. What's stopping you from starting now?"

Tried and tested steps recommended by a variety of financial professionals and successful budgeters include:

• The first thing Cordtz urges people to do is have a discussion with those they live with to ensure everyone is working toward the same financial goal. The entire family must understand budgeting and be honest with themselves and each other.

"If you don't have everybody on the same page, [a budget] very quickly unravels."

• Start a spending diary. List everything you spend for the month. Have one column for true needs and another for wants. Make sure you're very honest with yourself and don't put wants in the needs column.

Analyse the findings at the end of the first week and then month and watch how this information frees up money for debt repayment and starts to change your behaviour.

• Once you know what you spend, get a disinterested party to help you set up a detailed and precise budget, says Kilian de Lacy, budget adviser at Agape. To make sure you stick to the budget institute a strict regime of controlling spending and waste.

Local budget services are free says Lane Kennedy, a financial mentor at the North Shore Budget Service. They can help you understand your financial situation, help you write your own budget and learn to turn over a new leaf.

• Gradually replace the things and activities that cost money with free pleasures such as taking a walk or doing one act of service to put a smile on someone face.

• Contact your creditors. Start by working out exactly who your creditors are, says de Lacy. Borrowers have the right to request changes to a credit contract if unforeseen circumstances have caused hardship such as illness, employment, loss of employment or the end of a relationship.

• Sorted.org.nz has strategies for debt repayment such as snowballing and avalanching. Snowballing involves paying off the smallest debt first. A debt avalanche is where you begin with the highest interest rate repayments. The best strategy from these and many others is the one that works for you.

• Refinance the debt. One practical strategy to deal with eye-watering repayments is to refinance the debt. Consolidate the debt, put it on the mortgage, or move it around the banks on 0 per cent credit card offers until it's paid off. Beware, however, says Cordtz. Refinancing often leads people into worse debt if they fail to change their ways.

• Start planning for Christmas 2019 now, says Kennedy, to avoid a financial hangover from happening again. De Lacy suggests to clients they join a supermarket Christmas Club now and start putting away money.