Making the most of your money
Despite buoyant sales reported on the high street so far this Christmas, there is no doubt that plans to entice people to continue spending after Christmas are already underway. But with most people struggling to cover the cost of Christmas this year, how can you really expect to take advantage of the bargains on offer in the January sales?
"It's easy to be tempted by the sales and to convince ourselves that we need that bargain but with a slow recovery predicted for next year and pressure set to continue on household budgets, it pays to do your homework before hand.." comments Chris Morling, MD money.co.uk.
"Taking 5 minutes to decide on a sales strategy before you head out into the madness will mean you get far more for your money and don't end up with armfuls of 'cheap' goods you'll never use."
To help you manage your money and your expectations, money.co.uk has put together the following Sales Survival Guide with top tips to make your money work harder:
1 Shop between Christmas & New Year: On 1st January 2010 the 2.5% VAT cut we've enjoyed for the past 12 months will be no more. While it may have seemed like a token gesture this return to a VAT rate of 17.5% will mean that the cost of goods goes back up. For this reason it's a good idea to hit the sales between Christmas and New Year when retailers will have started their big sales (well, those that haven't already of course!) but you'll still benefit from the discount in VAT.
2 Make a wish list: Write a 'wish list' of items you either want or need now but can't quite afford at their pre-sale price. Take your list with you when you shop the sales and stick to it without fail.
3 Set a budget: It's really important to be realistic about what you can afford to spend in the sales. Decide on a realistic budget and stick to it. If you don't have any cash to spare then it's safer to steer clear of the shops so you're not tempted by a 'must have' bargain.
4 Decide how you'll pay: There's no point saving money on a sale bargain only to pay through the nose for it in interest. Fund your sale shopping with high interest credit and store cards and you'll risk paying far more for your purchases than if you'd paid their pre-sale price. Instead, either shop with cash that you don't need to spend elsewhere (remember your January credit card bill hasn't come through yet!), dip into savings you've built up (but don't leave yourself without a savings safety net) or spend on your credit card if you are certain that you can pay the balance off in full when your next statement date rolls around.
5 The only exception to this is if you use a credit card with a 0% offer on new purchases. If you go for this option remember that you will still need to make at least the minimum repayment every month and clear the balance in full before the end of the offer, otherwise interest will be added and any savings will be lost.
6 Look at the sale price not the discount: Yes, a 50% discount is a big saving but not if the item was overpriced in the first place. It's easy to get carried away with a supposed saving but instead just focus on the price you'll actually have to pay. Think about whether you would have paid that for the item pre-sale - if the answer is "no" just walk away.
7 Shop around: Just because the shops want you to get in a sales frenzy it doesn't mean you have to. Before you even head out the door you should check whether you can get the items on your sales wish list for less by shopping around and comparing prices online. Only once you know how little you can pay for your must haves should you even think about hitting the high street.
8 Haggle in store: One advantage the high street has over ordering online is that you get to speak to a sales assistant face to face. Use this opportunity wisely and haggle for all you're worth. Once you're armed with information and print outs that prove you can get the product cheaper elsewhere it's amazing what you can ask for.
9 Check the returns policy: Retailers don't have to give you a refund just because you've changed your mind so make sure you check the returns policy before you buy. Keeping all of your receipts is also a must.