Brits are expected to spend £430 on Christmas presents this year, according to a recent study by Finder.co.uk.
For many people this is money they don’t have.
But pressure to spend on presents and put on a good spread over the festive season could outweigh concerns about the cost-of-living crisis.
It may well lead many households starting 2023 with more debt that they can cope with, as spending gets out of hand.
The upshot could be even more debt as families struggle to pay off what they owe at a time when shopping and energy bills continue to rise.
We spoke to Jonathan Chesterman, debt advice policy manager at debt charity StepChange about these issues.
READ MORE IN MONEY
Best Boxing Day sales including Amazon with discounts up to 78%
I’m a shopping expert – the 8 items to buy in sales and save for Christmas 2023
We asked him what people should consider before flashing the credit cards or taking out loans to pay for Christmas, and what to do if you find you’re overspending.
It’s not about being a scrooge at Christmas time. It’s more about what to do to avoid starting an expensive 2023 without one almighty financial hangover.
The tell-tale signs of overspending
Christmas is an expensive time of the year, and it’s all too easy to succumb to temptation and spend more than you planned and can afford to make the most of the first proper post-Covid festivities.
But, as Johnathan explains, other priorities can’t be put aside.
Most read in Money
Inside Salt Bae's £36million palace in Istanbul with rooftop pool, gym & spa
Families fume as Christmas dinners ruined by rotten turkeys from big supermarkets
I'm a discount shopping expert – I save £100s a year with six tricks
Sky giving away five festive freebies to customers – including a free film
Jonathan says: “If you’re using credit to cover essentials such as food, or household bills, this is a key indicator that you may be in financial difficulty and could benefit from talking to your creditors or seeking free and impartial debt advice.
“Borrowing more to keep up with existing commitments is another tell-tale warning sign, as is finding that you are constantly running up an increasing credit card balance rather than being able to pay it down.
“Using credit when you’re not in a position to comfortably meet the repayments may lead to financial harm, particularly if that credit has high interest rates, which may be the only option available to someone with less financial resilience.”
What to do before you start writing Christmas lists
It’s all too easy to get carried away when drawing up a Christmas list for gifts, and for food and drink, or just avoid making a list in the first place. But budgeting is essential.
Johnathan says: “Go through your budget to look at what you can realistically afford to spend over the festive period.
"This is a really helpful way to identify how much money you have spare to go toward Christmas planning.”
Jonathan points out that StepChange has a step-by-step guide to making a budget and getting a clearer picture of your finances. You can find this at stepchange.org.
Don’t feel pressured into spending
Peer pressure is intense at Christmas, with so much advertising and the sense that it’s important to treat yourself and your family at this time of the year.
Yes, everyone wants and deserves to have a great Christmas, but as Jonathan points out this doesn’t mean overdoing it.
“There’s nothing to be ashamed of if you’re worried about your finances or experiencing problem debt.
This year more than ever we are all feeling the squeeze on our incomes, so don’t feel pressured to buy more than you can afford.
“Talk to your loved ones about ways you can enjoy Christmas without causing anyone to find themselves with financial problems in the new year.
“Chances are your friends and family wouldn’t want you to be left with debt that will take many months or years to repay because of your generosity over the festive season.”
Christmas spending dos and don’ts
Credit is very easy to get at Christmas, and it’s tempting to throw caution to the wind, have a great time and worry about the consequences at a later date.
But, as Jonathan explains, this isn’t the best approach.
He says: “Think carefully before you borrow money – try not to get drawn into short-term, high-cost credit, or options to buy now and pay later if it’s not affordable.
“If it’s going to take many months to repay what you borrow to pay for Christmas, it’s worth pausing for a moment to think about whether your friends and family would really want you to suffer financially as a result of your generosity.”
What to do if you overspend at Christmas
Good intentions and planning will help many people avoid racking up too much unnecessary debts at Christmas.
But, a large number of people do spend more than they can afford. Johnathan told us that each year StepChange sees demand for debt advice leap by around 50% between December and January.
He added: “If you fall into financial difficulty this Christmas, you don’t need to suffer in silence or wait until January to get in touch.
Read More on The Sun
Fans say the same thing as Tommy Fury and Molly-Mae spend Christmas apart
Royal fans say the same thing about chaotic Prince Louis moment
StepChange can help with free and impartial debt advice, which is tailored to your personal circumstances.”
Also, if you’re worried about making ends meet, are struggling to pay off your debts or don’t know how best to manage your cash, get in touch with us by emailing [email protected].
Source: Read Full Article
