Avoid a Christmas Credit Hangover: Smart Spending Tips for the festive season.
Andy Williams famously sang that Christmas is the most “Wonderful time of the year” but it's also one of the most expensive times of the year.
Pressure to please our loved ones, especially children, can easily lead to overspending this holiday season. But pressure is a two way street, and if you spend too much on presents for your loved ones, they may feel the same pressure to spend more. Money is always a difficult conversation to have and starting saving may prevent a debt hangover come January.
The first step is to plan a budget for your presents and plans. It may help to make a list of everyone you are planning to buy a present for, and allocate an amount. Then include any plans, like Christmas dinner and days out.
Once you have a budget, divide this by the number of months before Christmas. Trying to pay the whole of Christmas just out of December's pay can result in hefty credit card debt, or a reliance on Buy Now Pay Later, which can be dangerous in the long run. If you can, commit to saving a regular and realistic sum each month or week to make a difference when Christmas comes.
So how do you cut costs during the festive season without missing out?
Many shops put on sales for essentials like decorations and crackers - keep an eye out for reduced prices
A pre-Christmas cleanse of the house can get your house in order for the season, and could potentially put some money in your pocket if you choose to sell items using sites like eBay and Vinted, or a classic car boot sale.
Don’t discount second hand stores when shopping - many items are in excellent condition and you could find the perfect gift for a significant discount.
Christmas savings clubs sound great in theory, but you won’t gain interest on the money you put in, and they aren’t regulated in the same way that banks are. So if the Christmas club you're saving with goes out of business, you could lose all the money you’ve put into it.
Then when December rolls around, you're likely to get vouchers instead of money, which is limited to certain stores. Consider opening a separate savings account and you could get a higher interest rate.
After all the fun of Christmas, the bill can often leave a bad taste in the mouth in January. It can be hard to avoid using credit over the festive period but starting to save now will help to prevent that debt blow come January.
Need debt advice: Get in touch
