Paying for Christmas: My Top Tips

Christmas is one of the most expensive times of the year with all those gifts and festive feasting the costs can add up quickly and can easily get out of hand. Research from the Money Advice Service says that the average UK adult was planning to spend £530 on Christmas last year, with parents are expected to spend an average of £294.65 on presents for their kids, according to The Sun.

The Money Advice Service says that half of consumers (46%) plan to pay for Christmas by using credit cards, store cards and overdrafts which can ultimately lead to months of paying off the debt. Here are some top tips for keeping Christmas spending under control.

Make a plan

Presents; turkey; decorations; drink – it all adds up. The best offence is a good defence, so make a strict plan for the big day and stick to it. Check out the Money Advice Services’ Chrismas money planner to help settle on a realistic budget. Make a list of everything you think you need and shop around to find the best prices.

Do you really need that much booze? Can you ask guests to contribute towards a party? Would family members be able to share the cost of toys? Try and streamline your list as much as possible for a more affordable holiday period.

Reduce, Recycle, Reuse

Using the three Rs can help you evaluate your Christmas spending. Really streamline and reduce your list. Can you recycle any unwanted gifts from the previous year? Don’t feel guilty about re-gifting an item that perhaps isn’t really to your taste but a friend or family member might love – it would only sit in a cupboard getting dusty otherwise!

When it comes to festive food invest time in researching fantastic recipes for leftovers so that you really get all you can from the ingredients you have spent your hard earned cash on!

Christmas IOUs

It seems crazy that only a couple of weeks after Christmas the mad discounted offers of the January sales are upon us. Why not offer friends and family an IOU for a gift on Christmas Day and pick it up when it has dropped in price in January?

Set up a Christmas stash

Spread the cost of Christmas over the year by making a list of who you need to buy for and whenever you spot items that they would like during the year, perhaps in a sale, grab, wrap, and stuff ’em in a Christmas stash so they will be ready and waiting in December and you won’t need to dip too much into your December finances.

Borrowing: know what you’re getting into

If you just can’t make things work to your budget despite streamlining then do your research before borrowing.

• Resist hefty upfront discounts for signing up for a store card as they can come with extortionate rates, as high as 29.9%!
• Never go beyond your agreed bank account limit to pay for Christmas presents as you could get stung by very high charges for going into an unauthorised overdraft. Which? has discovered that an unauthorised overdraft can cost up to four times the maximum charge allowed on a payday loan, according to short term loan company Vivus.
• There are many good offers on credit cards to help you spread the cost of Christmas. However, if you opt for a special offer you should aim to pay back the balance before the offer ends to avoid being caught out.

Start saving for next year

It might sound obvious but the earlier you start saving up the easier next Christmas will be on the bank balance. If you start putting away money in January you should have plenty to dip into come December! Try setting up direct debit for an affordable amount each week or month and move it to a separate savings account so it is out of reach during the rest of the year.