RSS Feed

Related Articles

Related Categories

Costly Christmas needs careful budgeting

3rd December 2013 Print

The Christmas countdown is on and with three weeks to go, MoneySuperMarket reveals nearly a third (30 per cent) of Christmas spenders won’t be able to make their November salary last to fund the festivities.
 
With many people’s last payday before Christmas having just gone, a recent MoneySuperMarket poll of over 1,200 site users reveals only 26 per cent have budgeted for the expense of Christmas festivities and buying presents for friends and family. A third (30 per cent) will not be able to make November’s pay packet last, with nine per cent needing to dig into their savings to cover the shortfall, and a further 8 per cent will have to borrow on a credit card or loan to fund Christmas. A fortunate 13 per cent will get paid again before Christmas.
 
Kevin Mountford, head of banking at MoneySuperMarket commented: “With December already upon us, many people may be dreading the cost of Christmas presents and all the trimmings. For many, this year has been a financial struggle, with the cost of living rising at a faster rate than people’s disposable income. As a result, it comes as no surprise that a third of those polled will find it hard to make their November pay last through the Christmas season. Yule-tide can be an expensive time and it’s easy to get swept up in the festivities and spirit of spending. While we only have three weeks to go, there is still time to make a budget and stick to it, to avoid spending more than planned.
 
“While it may now be cutting it fine to start saving the pennies ahead of the festivities, there are things people can do to help minimise the effects of the seasonal splurge, especially heading in to the New Year. Savers, for example, should check the rate on savings accounts and look to switch to the most competitive deal in order to fuel savings returns.
 
“Those using plastic to cover the cost of Christmas could look at using a cashback credit card to earn money on spending- the cashback gained from spending throughout the next year could be put towards next Christmas’ funds. This is a much better alternative to high interest rate store cards as they offer a more competitive interest rate however, to reap the benefits of the rewards on offer, you must be able to pay off your balance in full every month. Opting for an interest free credit card on purchases could be another way to manage your costs if you’re unable to clear your balance straight away, providing you spend within your means and pay off the balance within the interest free period. However, if you require a card for Christmas spending, time is running out so you may need to apply now to receive the card in time.
 
“Responsible budgeting and spending really is a must this Christmas, to avoid a costly financial hangover that runs into January. The last thing anyone wants is to be paying off the cost of Christmas past next year. Think ahead about consolidating your debts in the New Year. Opting for one of the competitive balance transfer credit card deals or a low rate personal loan can make sure you are tackling any Christmas debt hangover early. It is also worth remembering that if you get a pay packet earlier than usual in December, it can be very tempting to use this cash to pay for Christmas, however think before doing so as January can be a very long month if you run out of money.”