Have a Merry Debt Free Christmas

merry debt free christmas
November 7, 2020 by Stuart Smale

Christmas is that magical time of year where we, for once, forget about everything else and concentrate on our families and loved ones. Presents, good food, good drink, holidays and all sorts of other exciting things are just around the corner, but for some families, it can also mean walking a debt tightrope to make it all happen. Don’t worry, your calendar’s not broken, it’s not Christmas yet, but good planning can never start too early. So how can your family have a magical, but financially sustainable Christmas? Let’s take a look.

Christmas Debt

As many as 30% of people get themselves into debt over Christmas, with an average of £3.5bn borrowed by UK families every year, an average of £200 per person. The rising cost of living and stagnant wages have contributed to an ever-growing burden over the Christmas period, and even when families don’t end up in debt over the festive period, as much as a third of people believe they’ll struggle to afford Christmas this year. One easy way to avoid debt is to prioritise your spending. Love a full turkey dinner? Spend your money there and set limits on presents spending. Love gifts? Try cheap or free activities with your family instead of paying for entertainment, like family walks.

Plan Early

The first rule of avoiding Christmas debt is to plan ahead. The last few months before Christmas are a good time to start, but even better is starting a few days after Christmas ends so that you’ve got a full year to prepare. Putting away a little bit every month into a separate bank account that you don’t usually access is helpful for taking the edge off, and can mean the difference between healthy and unhealthy finances come December even if it doesn’t pay the full bill. You can get help with this too, in the form of savings apps that automatically pay into an account, or round up pennies on the pound and add the change to the account. Another great reason to plan ahead is so that you can get the best deals. Buying presents around Christmas is much more expensive than getting the same items earlier in the year, and this also applies to food like turkeys or alcohol.

Prioritise Your Bills

Christmas is a carefree time of year, and it can be tempting to throw caution to the wind in exchange for a truly amazing festive season. The trouble is, bad decisions can catch up with you sooner than you might think, and spending your bill money in the run up to the big day can have serious consequences. However tempting it might be, never sacrifice your future security for short term enjoyment at Christmas time, or you can end up in serious financial or practical trouble.

Earn Extra Money

While you may not have an awful lot saved at the moment for Christmas, what you do have a lot of is time. If you’ve already cut your spending to the bone and used up all your creative methods for saving, taking a part-time or second job can also be an option. Luckily it’s never been easier to earn a bit of extra money on the side thanks to gig economy apps, some of which allow you to earn money from the comfort of your own home. Paid surveys, focus groups, copywriting, taxi services, food delivery and much more can be a great way to top up your income, and ensure you go into Christmas with a healthy wallet.

Tidy up Your Finances

Are you sure your existing financial arrangements are as efficient as they could be? If you haven’t looked recently there could be a lot of money to be saved just by making sure that you’re on the best energy tariffs, the best car insurance deals or the best of any other services that you use. Everything helps, from getting a better interest rate on your cards to switching your house over to energy-saving bulbs. All the money you end up saving can then go towards buying gifts and food at Christmas, and the savings will last for many more months, like a little gift that you’ve given yourself!

Get Cashback and Discounts

One of the best reasons for starting your Christmas campaign a little early this year is that you get a head start on all the cashback and discount codes when shops are still trying to entice you to buy. Everyone wants to shop at Christmas, so the retailers don’t have to work as hard to get your custom and the deals can often dry up. There are plenty of voucher code websites that you can use to bulk buy presents, products and food ahead of time. While the codes may not be for things you’d usually get, it can be a little adventure in itself planning your Christmas meals and gifts around your purchases, not the other way around.

Similarly, cashback is available on many goods and services in less busy periods, while some retailers may even stop cashback altogether the closer you get to December. You can earn as much as 5% or 10% with some outlets, which all adds up when you’re buying for the whole family. You can then use your savings to make Christmas go even further this year, or you can stash it away to start your savings kitty for next year.

Stick to Your Budget

No matter what, you can’t go into debt this Christmas if you don’t spend more than you know you can afford. It sounds obvious, but creating and abiding by a budget is the easiest and safest way of keeping yourself on track. That means no overdrafts, no credit card spending, no payday or short term loans, no hire purchase and no credit agreements. Remember, debt isn’t just for Christmas, and while it may help you get through the festive period without breaking the bank, all those rash financial decisions will catch up with you in the end.

Is the managing director of Cobra Payday Loans and Ready Money Capital Limited. He is responsible for all the day to day functions and performance of both companies and regularly contributes information on the short term finance sector. Stuart is an approved person with the Financial Conduct Authority, holding SMF3 (Executive Director) status.

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