There is a huge amount of pressure on families at Christmas: the average cost of technology-packed presents is going up far more quickly than our wages.
However, it is crucial not to be lured into excessive debt just for the short-term pleasure of Christmas – it’s not worth ruining the whole of next year just to have a fun day or two.
Here is the eight-point DMA Law guide to handling and avoiding debt this Christmas.
Work out a budget and stick to it. Decide what you‘re going to spend on each person and try not to go above that amount.
Remember to take the ‘extras’ into account, too – the cost of cards, wrapping, tags, decorations, as well as stocking fillers, can quickly add up and send you over budget.
Stick to what you can afford
Don’t hide from your bank balance – work out what you can afford and stick within the limits. Hiding from money problems always makes them feel many times worse than they often are.
This is a tough one, but children can sometimes have unrealistic expectations about the presents they might be receiving. Peer pressure can also play a huge role. Talk to them carefully about cutting back this Christmas – children can also be very understanding and you might find that talking about the issue really helps to ease the burden.
Avoid unplanned overdrafts
The penalties that can come with unplanned overdrafts can be huge. If you must use an overdraft, just talk to your bank first to make sure you don’t pick up any fines.
Be a smart shopper
Shop around! Make the most of the internet, if you have access to it, to find the best prices for products. Saving a pound or two here and there can quickly add up, especially if you are buying a lot of presents.
Avoid high APRs – don’t be tempted
As with unplanned overdrafts, short-term ‘payday’ loans and credit cards can quickly become very expensive. Paying interest on any purchase isn’t ideal, but be sure to steer clear of the more expensive offers of credit, even if you really need them.
Start thinking about next Christmas as soon as possible in the New Year. If that means saving up, then great, but it could also mean taking advantage of the sales to buy presents for December 2017.
Items such as decorations are often massively reduced immediately before Christmas, so buy these then rather than paying full price in the peak period from late November to mid-December.
If you are really struggling, get help. Confide in your family – we promise you’ll feel better – and consider talking to free advice services such as the Citizens’ Advice Bureau. Never, ever take on more debt to pay off existing debt.