Merry Christmas - or misery in January?

Whatever your view of Christmas, there’s one thing we all know – it’s going to cost us money.  And more than we can afford, unless we’re very careful.

For many families, their enjoyment of the season is spoilt by the worry of how they are going to afford all the extra spending. 

Unlike Cinderella’s Fairy Godmother, none of us can produce wonderful clothes, presents and banquets with a wave of our magic wand.  But we can make sure that we don’t let Christmas leave facing horrendous debts in January.

Top tips for a debt-free Christmas

1.    Talk to your partner, family and friends about Christmas spending.  Chances are they want to keep the costs down too, so you can all agree to spend less on each other.

2.    Make a plan for all your festive spending, not just the presents.  Think about what worked and what didn’t last year.  How many of those “stocking fillers” were abandoned or broken two minutes later?  And how much of all that “bargain” festive food was thrown away, or put in the freezer and forgotten?

3.    Watch out for easy ways of saving up for Christmas.  Many credit unions run Christmas savings schemes, and if you save with them you may become eligible for a low cost loan if you need it for a future emergency.

4.    Make a list of all the bills that have to be paid every month, whether it’s Christmas or not.  Work out how much spare income you have every month – then make sure you put some aside for emergencies before you start on your Christmas shopping list. 

5.    If you think you will need to use credit for Christmas spending, plan it carefully.  Read the small print on any credit deals, make sure you know exactly how much you will have to pay off each month.  Check you really can afford it after all the other bills have been paid. 

6.    Always find out the total cost of something you’re thinking of buying on credit. You’ll be shocked at how the cost rockets if you make monthly payments to a catalogue, for example.

7.    Manage your children’s expectations – there may be different ways to achieve what they want.  Perhaps you can afford to pay half the monthly payment on that smartphone if they get a Saturday job to pay the rest?

8.    Think even further ahead.  If someone is going to need new sports kit next summer, could you buy it in the sales and stash it away for Christmas?

9.    We can’t all be creative types, baking and making low-cost presents, but what about personal gift vouchers, promising future treats?  A 25% extra pocket money voucher, redeemable anytime in the year, perhaps?

10. If you think you are going to struggle with debts at Christmas, get help now.  Talk to a debt charity like Debt Advice Foundation, where advisers will help you check for any help you’re entitled to and put together a clear financial plan.