The best ways to pay for Christmas
If you don't have the savings to cover all the expensive Christmas delights, the temptation might be to borrow cash now and worry later. But do this and you could find your money worries stretch well beyond January.
So how can you pay for a Christmas you enjoy and also be able to start the new year with a clean slate?
1. Spend less on Christmas
Ok, we know this is an obvious one and you might think you can't possibly go without all the trimmings. But if you plan your spending rather than leave it to the last minute, then you will find there are ways to cut back.
You might even be able to find alternatives to the traditional merry-go-round of presents, parties and (mince) pies that don't cost as much but do the job just as well.
2. Spend less on other things
If you don't want to strip back your Christmas spending, you might be more willing to cut back on other things. Though there isn't much time to save a huge amount, simply cutting out on takeaways or shop bought coffees will boost the coffers in the run-up to the big day.
3. Plan how you'll pay back your borrowings
Hopefully a combination of the above two tips will help you stick to only what you can afford. But if you really feel the need to borrow money, there are a few considerations to think about.
First, do you have a plan to repay the money? The sooner you pay off the debt the less interest you will be charged, and the less likely your debts will spiral out of control.
Second, pay back as much as you can afford. People often get caught in the minimum repayment trap, especially on credit and store cards. But if you pay the maximum you can, the debt will clear more quickly.
Finally, are you eligible for a 0% interest purchase credit card? If you are, and you follow the two steps above by paying as much as you can each month and clear the balance before the promotional period ends, then you will be able to avoid incurring additional fees.
4. Start saving for next year
The best way to spend money at Christmas is being able to use what you've saved up for it.
If you want to avoid going without next year, start saving in January. Simply work out how much you'd like and divide it by 10. Then between now and October aim to put that amount into your savings each month just for Christmas. You'll then have two more months to top up your fund if you've fallen short.
If you're worried about dipping into these savings for other expenses, you can open up separate accounts for each savings goal. So one for Christmas, one for your holiday, one for emergencies and so on.
This article is provided by the Money Advice Service.