Five top tips to avoid a Christmas debt hangover!
Christmas is a time of giving, but you don’t want to give yourself a headache in the New Year with bills and debts you can’t afford.
It’s all too easy to overspend as there are tempting offers and pressures to buy, so it’s a good idea to decide how much you can afford before you start spending. It’s best not to get into the habit of overspending and building up debts. Check out our 5 top tips to avoid a Christmas debt hangover.
Tip 1: Plan early for Christmas
Be realistic and budget accordingly. Work out how much you are going to spend on each person and stick to it. It’s not nice to think about it but, when fixing a limit, consider how would you manage if you lost your job, or if in January the washing machine needed replacing. Manage everyone’s expectations as to what you or Santa can give.
Tip 2: Don’t forget to pay the everyday bills
Remember that rent, the mortgage, utility bills, food bills and other existing debts still have to be paid and the consequences can be severe if they’re not. Even though it’s Christmas, don’t let these bills slip.
Tip 3: Keep things simple
If you can afford to pay for your goods outright by cash, cheque or debit card, don’t be persuaded to take out extended credit agreements unless they really do work out cheaper. However, it often costs more to borrow. If you wouldn’t buy something with cash, why buy it with credit?
Tip 4: Shop around
Try as many different places as possible to find the best price. Buy what you want and not what other people say you need. Beware of extended warranties as the cost of a repair could be less than the cost of the warranty.
Tip 5: Shopping around applies to credit too
If you do need more money, not all borrowing costs the same. Some lenders are much more expensive. It may work out cheaper to take out a bank or credit union loan than putting gifts on a credit card or running up an overdraft. Pay day lenders may charge high interest rates so a quick online loan could end up costing more than you think. Do check the full payback amount and keep to the payment dates.
Start planning for next Christmas!
Once Christmas is over it’s worth looking at the bargains in the shops as many Christmas items are discounted and you can stock up on cards and decorations cheaply.
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