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.

Ignore consumerism

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.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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