With Christmas Day fast approaching, now is the time for shoppers to start looking at ways to save on their expenditure. We show you four options.
Keeping spending under control will be the focus of thousands of families across the UK as they embark on Christmas shopping, an annual expenditure that puts many households under great financial pressure and tips some into debt.
With cutting costs a priority for many households as the big day fast approaches, here are four ways to ensure you have a Merry Christmas and a Happy New Year, and don’t end up in stacks of debt.
1. Budget, budget, budget
This is arguably the most important step when it comes to keeping your expenditure in check. Decide beforehand how much you want to spend on Christmas presents and festivities this year and try to stick to your budget as much as possible.
Once you have a limit on how much you want to splash out, focus on making your expenditure meet your budget rather than the other way round. If something is likely to blow your budget, drop it for a cheaper item.
It’s important that the budget is set before you start your shopping rather than after you have identified some of the things you may want to buy. This way, the temptation to overspend may be taken away by the need for you to stay under an already set limit.
“Responsible budgeting and spending really is a must this Christmas, to avoid a costly financial hangover that runs into January. The last thing anyone wants is to be paying off the cost of Christmas past next year,” says Kevin Mountford, head of banking at MoneySupermarket.com.
2. Spread the cost
You can make the cost of Christmas more manageable by spreading the expenditure over several months. A credit card is the best tool if you’re to take this approach as it can allow you to effectively have an interest-free loan.
See if you are eligible for a 0% purchase credit card such as the Tesco Clubcard Credit Card for purchases, which is currently offering an interest-free period of 16 months. This means you won’t be hit by interest charges on purchases made in the first 16 months of having the credit card.
As long as you manage to pay off your Christmas expenditure by the time the 16 months run out, you won’t have to pay any interest. Any balance that’s on the card after this period will attract an interest rate of 16.9%.
But you still need to stick to your budget even if you’re going to put your spending on the card and you ideally want to have cleared the balance within 12 months otherwise you may find yourself still paying for Christmas 2012 by December 2013. With this in mind, only borrow what you can afford to pay off within this period or earlier.
3. Keep an eye on the price tag
London-born singer Jessie J famously told everyone to “forget about the price tag” in her chart-topping single Price Tag, which also had the line “it’s not about the money, money, money…”
Do this and you will quickly realise it’s all about the money as you will have run out of it before you fulfil your Christmas shopping list. You need to keep a keen eye on the cost of every single item you buy and try as much as possible to pay the least amount of money for it.
It can be a bit daunting sticking to this principle if you’re shopping on the high street as comparing prices can be very tricky. But you can solve this problem by going online instead.
Virtually every retailer has an online presence nowadays and, incidentally, many of them will usually offer cheaper prices on the internet than they do in their stores. What’s more, you may be able to use a voucher code to slice money off your bill and you can also use a cashback website such as Quidco or TopCashBack which allows you to earn money back as you spend.
Comparing prices is nearly always worthwhile, so ensure you do this if you want to stay within your budget. Read our feature on five ways to save hundreds of pounds shopping online for more ideas.
4. Consider free gifts
Controversial, I know, but it’s the thought that counts, isn’t it? There are thousands of free items that can make very good Christmas gifts on websites such as Smart Free Stuff and other forums that provide similarly complimentary or pre-owned items such as Freecycle and freegle.
Some of these items are brand new or unwanted and rather than letting them gather dust in forgotten drawers or at the bottom of the wardrobe, their owners choose to make them available to those who can make use of them, so why not take advantage?
Everything from clothes to books and cosmetic items can be found on such forums, so it may be worth checking them out. Just because something was bought in a charity shop, for example, doesn’t make it a lesser gift.
“Yule tide can be an expensive time and it’s easy to get swept up in the festivities and spirit of spending,” concludes Mr Mountford, who adds: “There’s still plenty of time ahead to make a budget and stick to it, to avoid spending more than planned.”