The decorations have come down. The crackers have been pulled. The gifts have been unwrapped. Yes, the festive season is now well and truly over. But as we hurtle into 2018, households are being urged to once again turn their attention to Christmas.
The Money Advice Trust (MAT), a UK-based debt charity, has issued advice to those struggling with their budgets, urging them to start saving now in preparation for next Christmas.
Partnering with the Association of British Credit Unions (ABCUL), the trust has suggested that households should ‘make a plan’ early in the year to avoid a debt-fuelled festive season. One of the top suggestions is to join a credit union.
The warning comes after YouGov conducted a poll on behalf of the MAT-run National Debtline. The survey revealed that 16% of people – or approximately 7.9 million – claim that January sees them fall behind with their money as a result of spending over Christmas.
In addition to this, a colossal 55% of those surveyed admitted that they didn’t start saving for Christmas until December. Conversely, just 14% said they had began saving for the same period before the summer. And while 23% of people told the survey that they’ll start saving earlier in preparation for Christmas, credit unions and Money Advice Trust said that this figure was still far too low.
Joanna Elson OBE, Money Advice Trust’s chief executive said:
‘After the celebrations of the Christmas period, January is a challenging time for many households with the impact of festive spending taking its toll on household budgets. With millions expecting to fall behind with their finances in January, we want people to be financially prepared for the year ahead. At the start of this New Year, when resolutions are being made, I would encourage everyone to look at their personal finances and make a plan if they can for 2018 – set a household budget, look at joining a credit union in preparation for next Christmas and seek free advice at www.nationaldebtline.org if you are struggling to cope. Taking these first steps to make a plan for your finances can make a huge difference for the rest of 2018.’
Following the MAT’s advice for households to join credit unions, the chief executive of ABCUL, Mark Lyonette explained:
‘Credit unions across the country help their members to save towards the costs of Christmas with dedicated Christmas savings accounts which lock funds away and make them available as the festivities approach. Even if you’re not in a position to start saving straight away, credit union borrowers are encouraged to save a small amount while they repay their loans – called Save as you Borrow – and recent research by the Fairbanking Foundation shows that 71% of borrowers become regular savers thanks to this approach. So if this year’s celebrations have left you with a financial hangover join your local credit union and make sure 2019 starts off on a better financial footing.’
The MAT has listed their three top tips for easing the household debt burden. Their suggested financial New Year resolutions are:
Make a plan for the year ahead – this, the Trust says, starts with creating and committing to a realistic budget.
Join a credit union – credit unions enable people to save for ‘occasional costs’ and give members access to affordable credit.
Deal with your debts now – it’s often better for households to pay off outstanding debt before saving, so the Trust suggests households should clear those to alleviate some of the financial burden well before Christmas.