Christmas spending: 12 budget tips for over 50sPosted on: 17 December 2012 by Gareth Hargreaves
Avoid New Year hangover by limiting Christmas costs
Frugal over 50s have tightened their belts over the past few years are among the most savvy shoppers in the UK. The baby boomer generations have shown themselves to be better equipped (than younger generations) to ride out a prolonged period of financial austerity.
But for some the cost of Christmas can still come as a bit of a shock. If you need extra cash, it's best to use savings, but if you do borrow money to tide you over the festive season, plan your borrowing carefully.
Make a list of all the things that you think you'll need to buy
As well as presents, don't forget to include things like decorations, wrapping paper, cards, stamps, entertaining, food and drink. And if you're shopping away from home or visiting relatives for the festive season include travelling costs as well.
Talk to your bank straight away if you are likely to need to borrow
You'll need to tell the bank how much you want to borrow and when you will be able to repay it. Be realistic. If you need to borrow £750 then ask for a limit of £750; if you can't afford to repay it all by January pay day, then ask for longer. You will only pay interest for the days that you are overdrawn, but the bank may charge a one-off or monthly fee. Never be tempted to go overdrawn without arranging this with your bank first. It will prove expensive.
Start your shopping early
That way, you'll be less likely to spend a fortune on something quite unsuitable in the last minute rush - and you can spread the cost of your spending over a period of time.
Make full use of any interest-free credit period
Many credit cards offer up to 56 days free credit provided you repay any borrowing in full by the due date. Take full advantage of this by planning your spending so that transactions reach your account just after the statement date. Some even provide insurance cover for your purchases. Make sure you don't spend more than your card limit.
Organise your borrowing
If you carry any credit card borrowing over into the next month, you will be charged interest so if you have several cards, organise your finances so that any borrowing is taken on a low interest-charging account.
Make sure you pay on time
Even if you are only making the minimum repayment on your credit card, make sure that you pay in time. Interest is usually charged on purchases from the day the transaction appears on your account, so the sooner you pay, the less interest you will be charged. The best way to pay is through your bank (allow at least 4 clear working days for the payment to be received). If you are paying by internet, you can set up payments straight away, but to go through at a later date (don't forget to make sure that there are sufficient funds on your account to cover). If you are sending a cheque through the post, beware of delays due to the Christmas rush.
Offers to "pay nothing this month" on your credit card bill may seem appealing, but remember that you will have to pay interest on any borrowing
Keep a note of the emergency numbers to phone in case your card becomes lost or stolen
Don't spend more than you can afford.
You might have a great Christmas, but you'll have a lousy New Year!
Spread large expenditure over a longer period
If you really intend to push the boat out this Christmas, by going on holiday abroad for instance, consider taking out a personal loan. By spreading payments over a longer period, say six or 12 months, it can be easier to manage. As the interest rate and borrowing period are both fixed when you take out the loan you will know exactly how much you have to pay each month. Shop around for the best rates.
Don't leave presents on the back seat of your car or where they can be clearly seen. Make sure too that you lock all doors and windows properly. You'll have taken a great deal of care choosing presents for family and friends - not for a thief
Keep a track of your spending by retaining your receipts - and in case presents aren't suitable. Tick off your receipts against your bank and credit card statements, but dispose of them securely - you could always add a shredder to your Christmas present list!
Finally, domestic appliances seem to have an in-built self-destruct system that occurs at the most inappropriate time. Ensure you leave enough leeway in your finances to meet the unexpected. Merry Christmas!
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