Top tips to avoid a Christmas Financial Hangover in 2016

The festive season has already started from an advertising point of view.  We are bombarded with adverts for this product and that product. Christmas markets and extended opening hours encourage over spending in every aspect of our lives.  In this blog, we look at how to avoid a Christmas financial hangover in 2016.

So how do we have a great festive break without the huge credit card hangover in 2016?

Christmas Budgeting

Christmas Budgeting

 

Are you fed up with receiving rubbish presents? Is it time to ask the family to STOP?

Ask extended family members not to give you presents this year. If you all agree it will save you time and money looking for those unwanted gifts. If this doesn’t work, why not agree to do a secret Santa for the family with a limit of £10 per gift?


Set a budget for your Christmas spending and make sure you stick to it!

List everyone who you will buy for this year and set a budget for all of their gifts.

Draw up a list for other items such as wrapping paper, food, decorations and sociailising too.

Once you have this list, check if you have the savings or income to pay for it or will you need credit to cover it?

Now the hard, part. Stick to it and don’t pick up items that look good but will cause you to overspend.



Track what you spend

You can do this on lots of apps that are available, spreadsheets or just a simple piece of paper. Why don’t you have the name of the person and the amount you wish to spend on them next to it on the list? Challenge yourself to try and get their present for less than you budget. You could even use the money you save as a treat for yourself or your family.


 

Set up a family IOU scheme

As most of the bargains come in January, why not give cash or vouchers for family members.

For the largest purchases you want this year, gift-wrap and IOU so when the family open it they know how much they can spend in the Sales. After all, some discounts are 50% so they can have an even better gift in a week’s time.



Use your “Christmas Club” accounts

You can also maximize your spending by cashing in the balance held in a “Christmas Club” account – built up during the year to spread the burden of the Christmas spend.

Maybe you also have credits on your store loyalty cards. These don’t earn you any interest, so cash them in to help finance your Christmas spending.


 

Shop around and look for deals

Use the internet to search for deals in your local areas. Try Groupon and other give away and discount sites and set up alerts for those products that are on your list.

Ask for a discount. There is nothing stopping you asking in store for a discount. After all, every retailer wants a sale, so they may well offer you money off.



Savings – Use the most appropriate accounts 

From your budget list above, identify how much you will need from savings. Try to avoid withdrawing from your ISA as they offer valuable tax-free benefits. Can you use deposit accounts instead? Can you access them now before Christmas or do you need to give notice? Act now if you have to give notice so you don’t risk going overdrawn.



Check your overdraft details

If you’re funding your spend on an overdraft, make sure it has been authorised and you know the interest rate and any other charges your bank applies to overdrafts.

Never use an un-authorised overdraft, as it is likely to attract high charges.



Bag 5% off ALL Christmas shopping

Cash back credit cards pay you every time you spend on them. Grab one, set up a direct debit to repay in full every month so it’s interest-free, and to boost the gain, use it for all spending.

 

Pay off credit cards quickly

If you use a credit card, ensure that you pay off the balance in full when the bill arrives in the January. Credit cards are an expensive way to borrow money – and store cards are even worse, given that they generally have higher interest rates.

If you’re taking advantage of credit card deals that offer 0% rates on balance transfers, make sure you know the date at which this introductory “teaser” rate comes to an end and pay off the balance before then.

  

Get your 2016 finances under control and book a FREE financial review with one of our qualified independent advisers.





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