Low-income and single-parent families should rein in their spending this Christmas or risk difficult times ahead, an economics expert has warned.

Associate Professor Roslyn Russell from RMIT University’s School of Economics, Finance and Marketing said low-income and single-parent families often went to great lengths to please their children at Christmas, to their financial detriment.

“Low-income families, sole parents, they will go without anything for themselves,” Prof Russell said.

“They will do whatever it takes so their kids don’t miss out.”

Prof Russell said families should consider setting budgets for presents and Christmas dinner, and stick to them, and set affordable goals for how much they planned to spend on each family member.

“If you can’t afford it, don’t,” Prof Russell said.

People who did not rein in their budgets were setting themselves up for a difficult year, she said.

Prof Russell also warned against falling into traps such as credit cards and interest-free periods.

“They sound very tempting at this time when you’re strapped for cash,” she said.

“All it takes is one default payment and they (customers) are paying an enormous amount more than what the product is worth.

“That can lead to some serious financial problems down the track.”

Prof Russell also suggested looking out for store deals and discounts closer to Christmas Day as shops start to off-load goods.

“Look out for some of those close to Christmas specials for last-minute things,” she said.

AAP