Key tips for parents to avoid getting into debt this Christmas
December 5, 2016
If you’re a parent and wondering how to pay for Christmas this year without getting into debt, the best idea is to plan spending carefully and not be tempted into buying more than you need by special offers.
With so many pressures on you to spend, it can seem like the most stressful time of year rather than the most joyful. To help you cope with Christmas spending and avoid getting into unmanageable debt in the New Year, here are a few tips that might make things easier.
It’s increasingly taken for granted that everyone will spend beyond their means at Christmas, and financially over-stretching seems to be the norm. Make this the year you set a limit on how much you’ll spend, and ignore the pressures of consumerism.
It’s not easy, but you may find that family members also want to save money. After all, it’s family time spent together that is important, rather than how much is spent on each present.
Make a realistic budget
Knowing exactly how much money you have once the essential living expenses have been paid will help you to set a budget and stick to it. Decide how much you’re going to spend on each person, and don’t be tempted to buy more.
Look online as well as on the high street
Shop around for the best deals, and don’t be persuaded into buying warranties or insurance that you don’t really need. The cost of repairing an item is often less than paying for the warranty, despite what the salespeople tell you.
Make your own gifts
Get creative and make or bake your own gifts. People appreciate the thought you’ve put into it, and you can save lots of money. Also making some of your own food, and freezing it ready for Christmas, reduces the chances of over-spending.
Consider a credit union
Credit Unions are not-for-profit organisations that offer a low-cost borrowing alternative when compared with payday and other personal loans. Some require you to save with them before you can borrow, but if you’re already a member you may be able to access borrowing with low charges and no hidden fees.
Avoid taking out new credit agreements
If you have the cash available, signing up for new store cards or taking on credit agreements that you don’t really need is a waste of money. You’ll end up spending far more than you planned, and it will only add to your debt situation post-Christmas.
Read the small print
If you see no other way than taking on a new credit agreement, make sure you understand the implications before you sign it. Look for any hidden costs and the total amount you’ll have to repay. If it’s an interest-free deal, you’ll be charged a hefty amount if a payment is missed, which can easily cause debt problems later on.
Talk to the bank
If you think you might exceed your overdraft limit, tell the bank, otherwise they will charge high fees for unauthorised borrowing. Let them know your plans to pay off any overdraft over and above the original arrangement.
Check interest rates
If you have more than one credit card, it’s a good idea to check the interest rate on each one. Rates can vary considerably, so there are savings to be made by using the card with the lowest rate.
Contact your credit card provider
If you’re likely to get into arrears on your credit card(s), talk to the provider to see if they’re willing to spread the repayments over a longer period of time. By being proactive, they may be more open to negotiation, and at least you’ve demonstrated a willingness to pay.
Figures published by research and analysis company, Internet Retailing, show that consumer spending reached £24 billion between 1st November and 31st December last year.¹
Scotland Debt Solutions helps Scottish residents escape the debt spiral. We can assist if you’re struggling to keep up repayments, or need advice on a formal debt solution. Call one of the team to arrange a confidential meeting free-of-charge.
The start of a new year is the perfect time to take stock of your finances and put plans in place for a financially savvy year ahead. While you may feel your problems are insurmountable, there are always things you can do to help, most of them surprisingly easy. Here are 7 ways you can […]
If you have credit card debt which is attracting a high level of interest, moving this balance onto a lower interest card could save you a considerable amount of money. This process is known as a ‘balance transfer’, and if done correctly, this process could save you money and also reduce the time it takes […]
Many thousands of young Brits are being actively encouraged towards taking on debt and spending borrowed money even before they reach their 18th birthdays. That’s according to the price comparison website comparethemarket.com, whose research suggests that roughly one in four 16 and 17 year olds in the UK have been offered credit cards or asked […]
If you’re in serious debt with no hope of repaying your unsecured creditors, you don’t have to wait for a creditor to take legal action against you. You may be able to take matters into your own hands and apply for sequestration (bankruptcy in Scotland). This also prevents your situation from worsening. There are two […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
Scotland has a number of formal debt solutions that can help you deal with a difficult financial situation. It’s advisable to take action as soon as possible, however, to prevent your levels of debt escalating when interest and other charges are added. Obtaining professional advice is key in this respect. An approved money advisor or […]