Christmas is only a few weeks away, and no doubt you’ll be wanting to indulge in all the gift buying, food ordering and decorating that comes with the festive season. However, many people fail to budget properly for the Christmas period. Not only are more and more people relying on credit cards to get them through, but some are drawing out loans that have high interest rates and difficult repayment schedules to cover the cost. Of course, there’s no problem with drawing upon credit if you can afford it, but many people are haphazardly applying for loans that do not suit them because they do not do enough budgeting or research.
Before you reach for credit – think carefully about your finances. Here are some tips:
Write everything down
You first need to consider what you would like to buy. Write out who you need to buy for, and what you would like to budget for each person. Then, think about extras, like food and drink, and put an approximate (but realistic) cost.
Then, look at what you have to spare
There’s no point getting yourself into debt over Christmas, so look at what savings you have and what you would ideally like to spend on Christmas. More often than not, the bank account doesn’t match up with the lists you have written.
So, cut down your requirements
It’s important to remember the sentiment of Christmas when you cut your list down. Don’t think of it as being stingy; instead, you’re being realistic about what you can afford. No one would want you to get into debt over Christmas spending. You don’t have to cut people off your list completely, either. What about just cutting the budget by £5pp? How about hand-making some gifts, or as friends, what about Secret Santa?
Only get credit if you know what you’re doing
Wonga have been blogging a lot about budgeting and obtaining credit for the right reasons. You need to be financially savvy. If you want to spend a lot of money on gifts, for instance, perhaps that would be considered bad credit and not worth the debt you’re getting into. Ask yourself, can you really afford it?
Your new budget should be realistic and obtainable. According to Wonga’s new ‘money academy’, budgeting means planning the amount of money you can spend on the things you need, based on how much you earn and can really afford. This makes sense really – but many people fail to consider how much money they are bringing in when obtaining credit. They say that by budgeting correctly, you can see how much you would really need that credit and how you would repay it.
Stick to your budget
Your budget is there to be stuck to, so don’t do any impulsive or last minute shops. They key is to being organised. Try buying online (and not last thing at night when you’re tired!) Carefully select items for your basket and then save the basket and come back to it later. Mull over your decisions and re-consider other options. DON’T BE TEMPTED by fancy TV ads, offers sent to your email inbox or catalogs through the post.