It’s beginning to look a lot like Christmas… And doesn't our bank balance know it!
Step into (what’s left of) the high-street and you’ll see that many of the shops have already whacked up a tree and some fairy lights, have Mariah playing on repeat and are encouraging you to start your Christmas shopping now.
You may be feeling a little bah-humbug about the whole thing, but starting to think about the cost of Christmas now, or even earlier, will be your first step in avoiding Christmas debt.
How can you avoid going into debt this Christmas?
In January, Londoners started the new year with £955 of post-Christmas credit card debt. And with the average brit planning on spending around £800 on Christmas this year, it’s imperative you stay in control of your finances.
Take a look at our tips on how to avoid overspending this Christmas.
Create a ‘Christmas Budget’
If you’re only going to do one thing, let this one thing be the one.
It doesn’t matter whether it’s December or March, you need to sit down and evaluate how much money you have and how much you’re able to set aside for additional Christmas expenses.
Secret Santa, mince pies, mulled wine and the inevitable new outfit for the Christmas party. It all starts to add up.
If you’re with the national average and you’re looking to spend around £800 on Christmas, you need to figure out where that £800 is going to come from. The sooner, the better.
Think outside the gift-box
As Kanye once rapped, my presence is a present.
And although that might be a little bit narcissistic to claim on Christmas morning, it’s worth having a conversation with friends and family as to whether it’s necessary to buy gifts for each other this year.
Simply finding opportunities to spend time together could be enough.
Or you could go one further and plan an experience or trip for you and your loved ones to take in the future (which conveniently delays the payment until later in the year so you can spread out the cost).
Home-made objects are also a lovely gift idea. Especially if they can be eaten. Or drunk… Sloe gin anyone? It’s time to get crafty for Christmas.
Consider how you’re going to pay for Christmas
If you’re already faced with mounting high-interest debts, chances are Christmas isn’t going to help the situation. And realistically, you’re not going to miss out on the merriment to try and fix it all in one month.
But you can free up some of your monthly pay-cheque by streamlining your debts through refinancing or debt consolidation.
Instead of sectioning off a large portion of your wage to pay back multiple high-interest loans that are costing you more over time, use our loan-calculator to see if we can help improve your quality of life.
37% of Britons put all of their Christmas gifts on credit cards last year. This will cost you more in the long run, especially as the average credit card purchase APR rose to 24.7%.
Using credit may seem like the least disruptive financial decision at the time, but the interest you have to pay back could affect you long into the new year.
Again, refer to our first point! The sooner you budget, the less likely you are to rely on credit to have a Merry Christmas.
Avoid buying for yourself
Christmas. The ultimate season of Treat Yo’Self!
Last year, 51% of Christmas shoppers bought for themselves too. With 40% of those purchases going on new clothes for the festive season.
Be thrifty, dig deep in that wardrobe to dig out an outfit from years’ past. Guaranteed people from the office won’t remember or care that you wore to last year’s Christmas party.
If you want that ‘new dress, new you’ feeling, you’re better off waiting for the Boxing Day sales.
Be strategic with purchases
Much like waiting for the Boxing Day sales to buy a nice new outfit, it’s important to be strategic about the timing of your gift purchases.
With the UK seemingly adopting Black Friday and Cyber Monday without actually acknowledging the Thanksgiving part - hooray for capitalism - there’s plenty of pre-Christmas sales to get your gifts at a discounted price.
Everyone’s Nana is gonna love shouting at the Amazon Echo dot on Christmas morning because it was next-to-nothing in the Cyber Monday Sales.
Find a second source of income
Christmas is always going to be expensive. But it’s inevitable and mostly unavoidable.
If your finances can’t stomach the extra costs, and you desperately want to stay out of debt, then look for a second source of income to make those Christmas costs easier to swallow.
Whether that means selling your unwanted to possessions, starting up a side hustle or picking up a few extra shifts, having another income that is purely to cover Christmas costs is going to help you keep the balance.
And as we all know, Christmas is chaos. So allow yourself a little more balance this festive season.