Festive budgeting & bargain-hunting

Posted on: 10 November 2009 by Mark O'haire

Be a smart Christmas shopper, and avoid starting the New Year with a debt hangover.

As Christmas approaches and demands on people's finances are increasingly pushed to their limits, it's ever more vital to become a smart shopper and avoid the financial pitfalls of the festive season.

Citizens Advice bureaux always see a surge in new debt enquiries after the Christmas festivities are over. The main problems last year were with arrears on loans and hire purchase, catalogue and mail order debts, credit card debts and overdrafts - and people looking for information on bankruptcy.

To help people manage their money for a debt free Christmas, national charity Citizens Advice has joined forces with Barclaycard to issue ten top tips to avoid a Christmas debt hangover, available online or in a handy credit card sized leaflet from bureaux.

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, council tax 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 and remember you have consumer rights to reject goods that are faulty.

Buy Safe To Be Safe

Whatever the deal, whatever the temptation, don't buy from traders you don't trust 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.

To find your nearest Citizens Advice Bureau or for fact sheets on debt and other money issues you can visit: www.adviceguide.org.uk

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