How to have a financially smart Christmas
Christmas is a time when the present list seems to get longer and the bank balance smaller, and it’s easy to be tempted into overspending. These tips will keep your finances manageable, putting you in good stead for the new year.
1. Make a list
Even those of us who are organised and level-headed for the rest of the year tend to spend more than we plan to in December.
Work out who you need to buy presents for, and don’t forget to include friends, family, work colleagues and neighbours and items for stocking fillers. Then decide how much you can afford to spend on each person, and stick to your budget.
2. Shop around
Buying online is often the best place to find presents cheaply, but you do need to factor in the cost of delivery, especially if you have left it a bit late and are going to need to pay for first class or next day delivery.
Once you’ve priced in delivery it may be cheaper to search online for the items you want, and then arrange to collect them at your local store and avoid the cost of postage.
Try not to leave your shopping until the last minute – impulse buys tend to be the least suitable and the most expensive.
You can use a web comparison site such as Price Spy to find the cheapest deals.
3. Choose the right plastic
Using a credit card can help with cash-flow in December, but picking the right one is important in order to avoid a financial headache in January.
Look for a card with a low APR (annual percentage rate) or a long interest-free period for purchases. You can find these by checking the best buys in Moneysupermarket.
If you are going to need some financial breathing space in January then it is worth applying for a balance transfer card now, as it takes a few weeks to process your application.
This type of card will allow you to move your debt to an interest-free deal, subject to a transfer fee which will be a percentage of your outstanding balance.
4. Resist the temptation to stockpile
Don’t buy more food than you will realistically need, and think about what you may already have. It’s easy to duplicate Christmas decorations and lights if you don’t know where you put them when you packed everything away last January so check in the attic first! Use discount shops for decorations and wrapping paper and check your cupboards and freezer for unused Christmas food.
Buy discounted food at sites like Approved Food which sells items which are close to their best before dates.
5. Beware of scams
Unfortunately this time of year sees a rise in bogus online shops and in gifts that never arrive. Try to stick to retailers that you know, and if a price seems too good to be true then it may not be a genuine business.
Look for the padlock symbol and “https” in the website address that will demonstrate the retailer has a secure payment service. Check your online bank account or bank statements carefully in case of any fraudulent transactions. Buying items on credit card gives you protection if the goods do not arrive or the retailer goes bust.
If you are a victim of fraud tell your bank straight away and report it to Action Fraud.
6. Get personal
A personalised present like home-made fudge or jam is a wonderful gift because it shows you have spent time and effort. Despite what Christmas advertising would have us believe, you don’t need to splash out on expensive presents just to demonstrate that you care.