This year has been financially tough on many families. For some, the cost of living has risen at a faster rate than their disposable income. Christmas can just become another financial burden that families have to deal with.
According to research from Gocompare.com, 23 per cent of of people will have to borrow money on a credit or store card this year to pay for Christmas.
The comparison website also estimates that, on average, we will spend £367 on food, drink, presents, parties and greetings cards over the festive period.
To raise money for Christmas, ten per cent of people will sell something that they no longer need, nine per cent will end up using their arranged bank overdraft, seven per cent will borrow money from a friend or family member and two per cent will end up using a payday lender.
Matt Sanders, Gocompare.com’s credit card expert, said: “The festive season can add a significant burden on those who are already struggling to make ends meet. Our survey suggests that many people will either go overdrawn or run up credit or store card debts simply to celebrate Christmas.
“If your Christmas spending plans rely on borrowing money, there are more cost effective options available, if you do your homework and shop-around. Now is the time to start planning if you think you will be unable to repay all of your Christmas debt in the New Year."
Budgeting also seems to be an issue, research from MoneySuperMarket.com reveals, saying that nearly a third of people won’t be able to stretch their November wage to last until Christmas.
It also discovered that out of 1,200 people who use the MoneySuperMarket.com website, only 26 per cent had budgeted for Christmas and eight per cent would need to dip into savings to cover the costs.
There are almost three weeks to go until Christmas is upon us, and according to Kevin Mountford, MoneySuperMarket’s head of banking, there is still time to make a budget that you can stick to.
Checking the the rate on savings accounts and switching to the most competitive deal will provide bigger returns. If you need to use a credit card, looking at one that offers cashback on spending as this can be put towards next Christmas.
Responsible spending and budgeting will ensure that there are no large debts hanging over your head in the new year.
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