Top tips to avoid a Christmas
debt hangover
•
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. Manage
expectations as to what you or Santa can give.
•
Don’t forget 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, get your priorities right.
•
Don’t bank on an overdraft
If you do need more money, don’t just run up an overdraft without
talking to your bank first – it will work out much more
expensive.
•
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.
•
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. Be wary
of extended warranties; the cost of a repair could be less than the
cost of the warranty.
•
Buy safe to be safe
Whatever the deal, whatever the temptation, don’t buy from
unauthorised traders and don’t borrow from unauthorised lenders.
The initial savings and convenience may prove to be a false
economy.
•
Read the small print
Check for hidden extras in any credit agreement. Work out the total
amount payable.
Ensure that the
monthly instalments are within your budget before signing. Interest
free credit can seem attractive, but if you don’t pay on time, or
miss a payment, you could have to pay a lot more.
•
Do your own credit checks
If you are going to use a credit card, shop around and compare
terms. Some cards charge high interest rates, but provide interest
free periods or discounts. Budget for all these costs and put the
payment dates in your diary.
•
Be organised
There’s a lot to remember at Christmas. If you’ve borrowed money
don’t forget that it
won’t be long
before you have to make a payment. Make sure you pay on time, even
if it is only the minimum, or you will be faced with additional
charges.
•
Start planning and saving for next Christmas
Once Christmas is over, it’s worth looking at what you did well and
what you didn’t. Learn from your mistakes and start planning how
you will do things differently next year. This
might also be a
good time to start saving for next Christmas.
Planning,
budgeting and discipline are key to avoid getting into debt at
Christmas and beyond. If your spending runs out of control, you can
soon find you’re in debt not only at Christmas, but it can become a
way of life.
If you do get
into difficulties, get advice as soon as you can from your local
Citizens Advice Bureau or visit www.adviceguide.org.uk | 