100 days until Christmas – get your finances in festive shape
For many hard-pressed Brits, Christmas seems a long way off and the thought of the additional pressure it will have on their finances will lead to many people deciding to ignore it until the last minute. However, with 16th September marking 100 days until Christmas Day, moneysupermarket.com, offers ten top tips for ways in which consumers can prepare their finances to pay for this year's festive season.
1 Savvy saving
It's not too late to start saving for Christmas this year and putting some money aside each month can spread the cost of the festive period. This will help to reduce the burden of having to solely rely on your December salary to pay for everything. Check the rate on your savings account to make sure you are getting the most bang for your buck - the current market leading easy access account is The AA Internet Extra at 2.80 per cent.
2 Cash in with a cashback credit card
Using a cashback credit card can make spending more rewarding as it gives you money back every time you spend on them. The cashback gained from spending throughout the year can be put towards next Christmas. For the disciplined spender, this is a great way to earn a return from their spending, but as with all credit products make sure you pay off the full every month and never borrow more than you can afford. The current best buy is the AMEX Platinum Cashback credit card, where consumers can gain an extra 5 per cent cashback in the first 3 months up to £100.
3 Set a budget and stick to it
The golden rule of festive spending is to know how much you have available and then stick to your budget. Not having a clear understanding of how much you have to spend, will mean it's very easy to get swept up in the festive cheer which could leave you starting 2011 in the red.
4 Don't fall into the store card trap
Beware of the allure of store cards; although the idea of an immediate discount on Christmas gifts or money back may seem like a good idea at the time, the interest rate on purchases is likely to be highly uncompetitive. Store cards tend to offered to customers by checkout staff with little or no financial understanding, and although the initial offer may appear tempting, the impact of not reading the terms and conditions could prove costly. Using a reward card is a much better alternative as they offer a more competitive interest rate and still reward you for your spending.
5 Make use of a zero per cent purchase card
If you haven't managed to save this year then a good way to help spread cost over a longer period is to shop around for a credit card offering zero per cent interest on purchases. Just ensure you pay off the balance as soon as possible and borrow within your means, or may you find you will still be paying off this year's Christmas presents next year.
6 Funding your holiday spending money
If you are jetting off this yuletide to sunnier climes or hitting the ski slopes, make sure that you research all your options before boarding the plane. Sorting out your travel money at the airport could leave you significantly worse off than if you plan ahead. Prepaid cards from FairFX or CaxtonFX can often give consumers the most spending power, as they have no purchase, withdrawal or foreign loading fees and can be topped up online or over the phone for free.
7 Shop around for loans
Take care if you decide to apply for a loan before Christmas as lenders often tighten criteria on personal loans in the run up to the festive period. It is really important that borrowers shop around for the best deal and ensure they only apply for products they're likely to be accepted for and that suit their needs.
8 Go online to research prices
Avoid impulse purchases and research prices before you buy. Comparison sites are great for finding out where to get the best deals and can give an indication on availability. Many online retailers offer web only deals and some offer free standard delivery. Also, keep your ears open for retailers starting their sales early and make the most of any special offers or BOGOF deals.
9 Use a discount voucher to nab a bargain
There are hundreds of downloadable vouchers and discount codes to be found online which can help you make big savings on your Christmas shopping. Try using voucher websites such as moneysupermarket.com/vouchers or go to retailer websites directly.
10 Make saving your resolution for 2011
Adopt a savings mantra early in the New Year and start putting aside money into a regular savers account. By starting saving as soon as possible it will mean that by this time next year you will have built a tidy savings pot, which will prevent you from funding Christmas 2011 with debt.
Kevin Mountford, head of banking at moneysupermarket.com, said: "Although Christmas still seems a long way off, you should start thinking about how you will pay for the festive period. Many fail to plan for Christmas and end up carrying their funding problems into the New Year as they franticly chase ways to fund retrospectively. Taking action now, rather than leaving it to the last minute can help ease the financial pressure come December.
"If you are worried about how you will finance Christmas this year, then think carefully about whether you really need to spend a fortune. Spending time making handmade Christmas cards or baking a cake as a present can be just as rewarding as spending money on the latest must have items. However, if you do need to borrow then make sure you have a clear plan on how you will repay your credit card or loan. Although it may seem a simple solution to put your spending on your credit card, you really don't want to be paying for this Christmas come the next one."