Christmas Is Coming - The Debts Are Getting Fat
With the clocks going back this weekend it looks like the extra hour gained will be lost queuing up in shops as the Christmas shopping sprees kick off to an early start.
For many, planning ahead when it comes to a Christmas budget remains pretty much something we forget to do. However there is still time to think about your spending and how much you are prepared to pay out over the festivities. There is nothing worse than seeing in the New Year with hefty bills and increased debt as a result of overspending.
Perhaps the first place to start is to write out a Christmas shopping list and work out just how much you can afford to spend. Make sure your list covers all the essential costs i.e. gifts, food, nights out and in some cases a holiday. Stick to your budget and try to eliminate things that may be an unnecessary waste of money.
Some people manage to set aside money at the beginning of the year so that by the time the Christmas decorations come out, they have their Christmas list covered financially. You might want to consider investing any spare cash into a savings account, such as an ISA, this way it will be earning you interest over the months leading up to Christmas.
Others may opt for a Christmas saving club where they contribute an amount each week and withdraw the balance at some point in the weeks preceding Christmas.
Another way to cut back and reduce your spending is to buy as much as you can in the mid season sales, this way by the time December comes around you will not have to rely on your wages or overdraft facility to get you through the festive expenses.
Remember that if payday falls just before the 25th of the month, you will not receive your next pay until practically the end of January. Therefore you need to be sure that you can survive on what you have without going into debt. For those lucky enough to get a Christmas bonus your prayers will be answered and Christmas will come early.
If you are already on a tight budget and are unable to put aside any savings there are other alternatives at hand. You will therefore need to borrow money so it is well worth checking over the best way to do so. Make sure you choose the option which will cost you the least amount in repayment costs, i.e. interest, in the long run.
When borrowing money you need to establish just how much you require without falling into the trap of extending your shopping lists under the pretence that you will soon have available money; you still have to pay it back.
Check first to see if an overdraft might be sufficient; by arranging an overdraft with your bank manager you will not be liable to pay a penalty charge.
If you feel an overdraft might not be flexible enough and providing you have a good credit rating you could shop around for a credit card that offers 0% on purchases. However to take advantage of this offer you must ensure you pay off the balance before the end of the 0% purchase term otherwise you will end up paying substantial interest set at a high rate. Try to find a credit card that offers a 0% period for a longer period such as 12 - 15 months which will ultimately help you pay off your balance without any interest adding further to your debt.
You may also consider an unsecured personal loan which may work out to be much cheaper option and in addition offer a considerably lower interest rate. If you go this route you must remember that with any borrowed credit, the longer it takes you to pay it off the more interest you will pay out in the long run.
Try to put into practice the key rule: stick to your budget, pay off outstanding debts and bills as soon as possible and make planning ahead for Christmas a new year's resolution.
For a fast and efficient way to compare savings accounts, credit cards and personal loans you can shop and compare for the UK's best deals right here at the MoneyOutlet
Published on October 30, 2007
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