3 steps to avoid Christmas debt in January - from Debt Advisory Centre Scotland
The Debt Advisory Centre Scotland has issued some advice about how to avoid getting into debt over Christmas.
Dec. 6, 2012 - PRLog -- Glasgow, United Kingdom -- Christmas is a time to eat, drink and be merry. It can be so easy to get caught up in the spirit of Christmas, however - and spend even more than you intended.
Come January, it's likely that many people will be reluctant to open their bills and bank statements - for fear of what's inside.
But there are ways you can avoid debt over Christmas - and approach your bank statements with confidence in January. Debt Advisory Centre Scotland has these tips to help you:
One of the best ways to deal with the cost of Christmas is to plan ahead and make a budget.
Work out roughly how much you're planning to spend on each area of your Christmas festivities. For example, people taking part a survey for HSBC survey said they planned on spending an average of £526 on their festivities this year. They wanted to spend an average of £347 on gifts and £179 on entertainment, food and drink.
Think about how many nights out or festive meals you have planned and how many presents you're going to buy. Then figure out roughly how much these will cost each. Add them together, and you'll know roughly how much you're going to spend over Christmas. You can also look at your Christmas budget and see whether there are any areas where you could - or should - cut back, and act accordingly.
It might be too late to start saving for this Christmas (although there's always next year).
If you have savings already, you might want to weigh up whether you should chip into these for your Christmas spending. It's always advisable to leave some behind as 'emergency savings' however.
Remember that it's always advisable to use your savings before you resort to borrowing.
It's always preferable to only 'spend what you actually have' over Christmas. Sometimes savings aren't enough, however - or your savings are 'earmarked' for a specific purpose (e.g. a house deposit).
In this case you might have considered borrowing to fund Christmas - in the form of a credit card, loan or overdraft.
Christmas is often seen a time to relax and enjoy yourself, not a time to scrimp and save - and if you're in the right financial position, borrowing responsibly could help fund your festivities. You're only in the right position if you feel comfortable about your current finances, you don't have too many debts already and you know you could afford your repayments.
If you are going to borrow, there are some important things to think about. Firstly, make sure you're getting the best deal available to you. Compare loans and credit cards etc. using an online service. Choose one with low interest rates, and repayments you can afford. If you don't think you can afford the repayments, don't take out the credit.
Once you've found an attractive deal, you have to be absolutely sure that you can afford to pay it back in the allocated time. If you choose a credit card, you could even try and pay off the balance in full before it starts charging interest. If you choose a loan, you can specify how long you want the repayment period should be. On the one hand, make sure you make it long enough for you to repay comfortably. On the other, don't make it too long or interest will have more time to develop.
An expert from the Debt Advisory Centre Scotland said: "If you can't afford to repay what you owe, you could find yourself in real financial difficulty. Christmas is fun - but it isn't worth getting into debt that you can't repay.
"If you're already struggling, contact an expert straight away. The right debt help could reduce your monthly payments to a level you can afford - giving you a bit of relief over Christmas."
Notes to editors
Debt Advisory Centre Scotland provides customers with a range of solutions to their debt problems - including ones that are only available in Scotland.
For more information, visit the Debt Advisory Centre Scotland website at:
Debt Advisory Centre Scotland
Tel: 0845 056 6480