Avoiding a debt hangover this Christmas
Christmas is depicted as the most wonderful time of the year. For many though, Christmas can ultimately be the most worrying and stressful time of the year. With so much pressure to have the ‘perfect’ Christmas, buy the ‘perfect’ gifts and attend every festive gathering on offer; Christmas can very often be the catalyst for a debt disaster.
According to www.thebankofengland.co.uk the average UK household will spend an extra £800 in December. If following a standard repayment plan, it would take a person up to 4 months to clear this.
With the total average household UK credit card debt hitting £2,603 (www.themoneycharity.org.uk) this added pressure only adds fuel to the fire.
Top tips to avoid a debt hangover this Christmas
1 Preparation is key
It is important to be realistic about what you really need to buy and what you can afford to buy, and budget accordingly. Lists and budgets should be your new best friend.
2 Talk to family and friends
If you are feeling stressed and overwhelmed with the expense of Christmas, chances are you are not alone. Why not arrange a secret Santa within your family circle or group of friends? Agree on a budget and reduce the expense and stress of your Christmas shopping experience.
3 Be a savvy shopper
Sales and annual events such as Black Friday can be tempting and encourage you to spend over your means, but if planned properly can be a great way to save on your spending. Give yourself time to prepare a list of what you want to buy and shop around for the best deals. There are always some great tips on www.moneysavingexpert.com.
4 Think outside the box
Don’t forget gifts do not always have to be tangible. Sometimes people appreciate the gift of your time and company. Why not forgo the traditional Christmas present swapping for a family gathering or lunch with friends? You might be surprised by how many in your circle would be delighted to hear this suggestion!
5 Get creative!
If you do have a creative spark, have you considered making Christmas gifts? This type of gifting can be relatively less expensive and very personal.
6 If you don’t need it…sell it!
eBay and Gumtree are a great outlet to sell unwanted goods and gifts. Why not de-clutter your home and sell some items that you do not really need or want? This can be a great way to earn some cash in the run-up to Christmas. You might even spot a few bargains on there for your Christmas list.
7 Don’t forget the everyday bills
Christmas happens, but unfortunately your everyday bills and commitments happen too. Make sure you have met all your priority payments, such as mortgage, rent and utility bills before setting aside your Christmas spending fund.
8 If you can pay now, pay now!
Taking extended credit can be tempting but can often cost you so much more. Make sure to carefully read the fine print and if you can pay outright, it is generally best to do so. If you do have to take out a credit agreement, make sure the monthly repayments fit comfortably within your monthly budget.
9 Staying safe online
Make sure you do your research, and if you are purchasing online be very wary that you are buying from a genuine retailer. That old adage is very often true, ‘if it seems too good to be true, it normally is!’.
10 Start planning & saving for next Christmas
If you did not manage to plan and save adequately for this year, make it top of your resolutions for 2020. Putting aside a little every month can really make a difference in the long run. It is also a good idea to put your funds into a separate savings account, in order that you avoid the temptation to dip into it during the year. There are also some great apps that help you to manage your money on-the-go. From clever ways to cut your expenses, to notifications when you’re over-spending, these apps can help you build up a savings pot and also act as a great planning tool.
Planning, budgeting, and organisation really are crucial to avoid getting into financial difficulties at Christmas and beyond.
It’s good to talk! We can help.
If you do get into difficulties, it is important that you get professional debt advice as soon as possible, in order to stop the situation escalating.