DebtPersonal Finance

The Biggest Debt Threats Over Christmas

With Christmas coming, you’re going to have one eye on all those sparkly decorations – and one eye on the bank account.

No doubt about it, Christmas is an expensive holiday, whether you’re struggling financially or not, so it literally pays to know what the biggest debt threats are, so we can budget accordingly.

It may only last three days, but these are the expensive mistakes we all know we shouldn’t make, whenever it’s the time of year that Santa bring his sleigh into town…

All those Christmas parties

Friends are going away for a few weeks; your workmates fancy a curry… You know how it is, one invitation rolls in and then before you know it, you’re fully booked from December 1st right up until New Year.

It’s not just the dinner and drinks, you’ve got to worry about what you’re going to wear (or should we say, what you’re going to buy to wear) and the small issue of the office’s Secret Santa.

Careful budgeting is essential here, because just one of two extra nights out, when the party mood glitters like a bauble, will put a serious dent in your bottom-line.

Budget tip: Invite your pals ’round for a mini-Christmas do, with some classic tracks and Christmassy movies

Buying way too much food

If you didn’t know any better, you’d think a hurricane was coming. Shelves stripped of snacks; no turkeys in the freezer. Panic buying at its cosiest. Why buy two tubs of Twiglets when you could have five? And it’s not like the shops make it any easier, with all their tempting deal.

You know, because for one day a year, most of the shops are shut – and even though we know it’s business as usual the next day, we still stock up on way more food than we need. We start fretting about whether Aunt Maud has enough sherry to last through 24 hours, while we feast on a limitless supply of cheeses, meats and Quality Streets.

Budgeting tip: Buy in advance, buy deals, and don’t buy more than you’ll realistically get through over the holidays.

Getting that expensive gift for a loved one

This is so easily done, right? It might be ridiculously expensive, but the look on your partner’s face will be beautiful that it makes it worth it.

We know we shouldn’t spend out, but we’d hate to disappoint a loved one – especially at Christmas – so we go ahead and buy it, hide it, spend what feels like thousands of pounds on enough shiny paper to wrap it.

The trouble is, that one gift can seriously impact the following year’s budgeting, particularly if it’s bought on credit and paid back at higher interest rates.

When money’s tight, it’s worth being upfront about it, so that expectations can set. Christmas isn’t about how much money a gift cost, after all, but how much thought went into it.

Budget tip: Agree to spending limits – and stick to them.

Those last-second impulsive buys

They’re almost impossible to resist: When you’re high on Christmas spirit, and you see something that would be absolutely perfect for a loved one, you’ll probably just go ahead and buy it.

You’ve probably already got them a little something under the tree, so this gift last-minute gift is a nice bonus. It’s also an extra expense that you haven’t budgeted for – so what you’ll need to do it, perhaps, a little counter-intuitive. You’ll want to budget in advance for impulsive purchases like this.

It’s part of your rolling Christmas budget (you can read more about it here) that allows you to be more creative and more honest with your budgeting, so you can avoid debt and save money at this time of year.

Budget tip: Maintain a rolling budget that accounts for those Christmas impulse purchases that we all can’t help but make.

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