Strapped for cash: two in five of us admit to not saving for this Christmas
- One third of Brits struggled to pay for bills in January because of overspending last Christmas
- One in five people will turn off the central heating to help pay for Christmas this year
Despite having twelve months to do so, two in five of us (44 per cent) have not budgeted or saved in advance for Christmas this year, according to new research from Barclaycard*.
The research finds that older does not necessarily mean wiser when it comes to responsible spending, as exactly half of those that are over 55 years old have not saved at all. This is compared to a significantly fewer number (37 per cent) of those aged 18 to 34 years old.
Whilst one third (31 per cent) of Brits confessed to not being able to pay for bills in January as a result of overspending during the festive period last year, the majority of us (54 per cent) still plan to spend the same amount on Christmas food and drink as we did last year and one in ten (7 per cent) of people plan to spend more on Christmas parties and going out than in 2010.
The research also found that although discount vouchers remain popular, with one third (32 per cent) of people using them to help budget for Christmas 2011, Brits have found more novel ways of cutting back. One in five (22 per cent) people admitted to turning the central heating off or down more often, whilst six per cent of us have sold unwanted Christmas presents from 2010 to help fund this year.
To help people avoid a Christmas debt hangover, Barclaycard has teamed up with Citizens Advice to develop ten realistic tips that can be applied no matter what the budget.
Alan Ainsworth, Head of Public and Community Affairs, Barclaycard, comments on the findings:
"Whilst Christmas is a time for giving, it is essential to plan and budget in advance to make sure you aren't caught short when it comes to paying for bills and other expenses in the New Year. This doesn't always have to mean cutting back on the number of presents you buy or parties you attend, more so, it's about establishing a budget ahead of time and making sure you keep to it. If this isn't possible then there are plenty of others things you can do to save for the big day, from deciding how much you can afford before you start spending, to shopping around to get the best deal as well as reading the small print to check for any hidden extras."
Most popular for the chop when it comes to the present list is friends and the extended family as a quarter of Brits (26 and 24 per cent respectively) reveal they would not buy presents for these people if they had to cut back on who to buy for.
The research also found that the aspect of Christmas that people are planning to spend less on this year is Christmas decorations, with one third (35 per cent) sacrificing tinsel and fairy lights.
Gillian Guy, Chief Executive, Citizens Advice, adds:
"Much like that unwanted woolly jumper the results of your seasonal spending can stay with you for longer than you might like. Every January our bureaux see the result of this with a spike in enquiries from people who are struggling to keep on top of bills and debts due to overspending throughout the festive period. For anyone who does run into difficulty our advice is always to seek help as soon as possible so you can get your finances back on track and avoid spending next Christmas worried about your money."
Top ten tips from Barclaycard and Citizens Advice:
1) 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.
2) 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.
3) 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.
4) 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.
5) 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.
6) 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.
7) 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.
8) 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.
9) Be organised
There's a lot to remember at Christmas. If you've borrowed money don't forget that it wont 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.
10) 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
*2,002 UK adults polled by Opinium from 25 to 28 of November 2011; research commissioned by Barclaycard
Notes to editors:
- The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
- Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014 service statistics see our quarterly publication Advice trends
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.