Christmas is coming - make every penny count!
Christmas is a special time of the year to spend with friends and family, but research from the Money Advice Service in 2013 showed that a third (34%) knew they would start the New Year in debt.
Festive spending can quickly spiral out of control and have a knock-on effect on your personal finances year-on-year. But if you start to make a few simple changes to your everyday spending during the weeks leading up to Christmas, you can prevent waking up with a financial hangover in the New Year.
Jane Symonds, money expert at the Money Advice Service comments: “Christmas can easily turn from an exciting time with the family into a big financial stress. If you haven’t already set a budget, now is a good time to take control of your spending. Tools such as our Christmas Money Planner - www.moneyadviceservice.org.uk/christmasplanner will help you prioritise the essentials and commit to a savings plan to make sure the festivities can still be extra special.
“We also have plenty of impartial advice to help people prepare for the year ahead - from how to set a savings goal to why it's important to review all your borrowing options before you take on extra debt.
“Christmas can be an expensive time of year, but it’s important to know that you don’t have to live beyond your means to make it a fun time, especially if you plan well in advance - after all it does come every year!”
Here are five handy tips to help you enjoy the celebrations without overspending:
1. Fix your budget: List what you expect to spend on Christmas – from presents and decorations to all other expenses such as food, socialising and transport. Keep a detailed list of your expenses so you don’t blow your budget. Be mindful that you’ll have to keep some cash to pay the mid-January bills after Christmas. Our Christmas Money Planner is a quick and easy way to help you stay on track.
2. Boost your Christmas fund: Make savvy savings on your day-to-day spending. You might be surprised at what you can cut back on to free up some spare cash! For example, limiting takeaways, taking a packed lunch to work, and swapping your morning cappuccino for an instant coffee throughout December can make a real difference. Our Cut-back calculator will quickly show you how spare change soon adds up to boost your Christmas fund.
3. Online or offline? Watch for special offers, and check for discount vouchers online and in newspapers. When comparing costs, always check if delivery charges are included in the total cost so you don’t get a shock when you get to the checkout!
4. Credit warning: Payday loans are advertised as quick access to cash, but can cost a lot more than you bargained for if you do not repay in full or on time. Always explore all the alternatives before considering this option. For example, you could extend your overdraft, apply for a credit card or join a local credit union instead. Read our guide to using payday loans.
5. New Year's resolution: Come January 2015, next Christmas will seem far away but it’s never too early to start a savings plan to fund the festivities in 2015. Open a savings account and transfer a set amount via Direct Debit each pay day. Over the course of a year, a small amount each month (say £10) could accumulate a tidy sum (£110) which could make a big difference when Christmas comes around again.