Tuesday, 5 November 2019

10 Tips For A Debt Free Christmas

Did you know that almost 1 in 5 people find themselves in debt due to Christmas spending? From gifts to decorations to lavish meals, the holidays can leave you feeling less merry and more cash-strapped.
If this sounds familiar and you want a wonderful holiday season without the financial stress, here are some tips to save money for a debt-free Christmas:
Set a spending limit
Make a list of everyone you want to buy a present for and the type of gift you have in mind. Whilst Christmas shopping is all part of the fun, having a few ideas written down can help prevent panic buying as Christmas approaches.
It also helps to set an overall spending limit by figuring out how much you can afford to spend without feeling stressed or going into debt (https://www.nimblefins.co.uk/average-household-debt-uk). If you buy your Christmas shopping on a credit card, only spend what you can afford to immediately pay off in full.
Remember that Christmas spending is optional, unlike keeping a roof over your head, feeding your family and avoiding debt. Finding yourself in debt is a terrible way to start a new year.
Earn extra money for Christmas
There are many creative ways to earn extra money for Christmas expenses, from getting a part-time retail job or babysitting to selling your stuff. Depending on your skill set and what you have stored away in your closets or garage, there are many ways to find extra cash to help pay for Christmas without having to go into debt.
Open a savings account
If you plan on saving money each month to cover Christmas expenses, one of the best ways to ensure you don't spend it on other things is to open a separate savings account. Even a small amount saved per month can add up to a lot towards the end of the year. You can even get the kids involved too, which will help teach them about money and financial responsibility when they're young.
By only using that account to buy Christmas items, it's much easier to stay within your budget.
Avoid payday loans
The adverts for payday loans are everywhere these days and in times of financial stress, it may be tempting to get one, especially when you can get the money in a matter of minutes. The unfortunate reality is that payday loans are very expensive. Interest rates can be up to 1,500%, which is significantly more than the typical credit card APR of around 22%. As a result it's very easy to get into horrendous debt trying to pay back a payday loan.
If you are considering a payday loan to pay for Christmas, it's likely your finances will be in a worse position afterwards. Many people have been crippled with debt due to payday loans, so they should be avoided especially for optional spending such as Christmas.
Shorten your Christmas list
From sending cards to your mother's neighbor's hairstylist, to buying presents for every person in your family tree, before you know it your living room could double as an Amazon warehouse.
It's worth discussing the idea of shortening your Christmas list. Many families these days only give gifts to the children or use a "Secret Santa" system where each person pulls one name out of a hat and buys just one gift for that person. In some cases an extremely low limit can be more entertaining as it requires creativity!
Deal hunt early in the year
Throughout the year retailers have sales, especially on toys and other gift items. If you can avoid buying things you don't need, you'll find there's plenty of savings to be had in sales.
Keep an eye on other spending
With the spending madness that ensues during the festive period, it's easy to forget about your other everyday expenses.
It's a good idea to look through your bank statement every month. Check for any unnecessary spending such as unused gym memberships.
And if you like to catch up with friends and family during the holiday season, why not invite everyone to your house instead of going out? You can still have a great catch up at a fraction of the cost.
Practice restraint
If you get swept up buying gifts or decorating, you may find your Christmas expenses soon add up to a very large amount without you even realizing.
Just how much food and drink does you family need over Christmas? If you have leftovers for weeks, you may be buying too much.
Trade in reward points
Christmas is a great time to use up rewards points from your credit card that otherwise just sit there.
Using points can works out as excellent value, especially if your points would otherwise expire.
Avoid January sales
We've all seen the news footage of people lining up outside department stores as early as midnight on Boxing Day, ready to burst through the doors to pick up a discounted toaster or half-price jumper. Who can resist a deal, right?
It might sound counter intuitive to avoid a sale, but unless you're shopping for something you need it's simply a waste of money. Whilst there's an argument for buying ahead for next Christmas, there's a good chance you'll forget you have it in the closet.

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