How to plan financially for Christmas

For many children, Christmas really is the best time of the year. The prospect of Father Christmas coming with presents, combined with chocolate, sweets and the school holidays make the festive season a winner for most kids. However, the very things that children look forward to can make adults baulk; the costs of presents and food, as well as time off work, make Christmas financially challenging.

We at Overdraft know the importance of making Christmas special for your family and friends, but also the importance of doing it within your means. We have created a brief guide on how to have a successful Christmas without breaking the bank.

  1. Set a budget
    It can be very easy to spend money around the festive period without really considering the total cost of everything you have spent. If you create a budget well in advance then you are more likely to stick to it, as you have put all that time and effort into making it. Equally, it is well worth putting money aside specifically for Christmas as early as possible, to ensure that you have enough saved for all of your needs.
  2. Never take out a loan
    Taking out a loan just to cover the costs of Christmas may seem like a good idea at the time, but once the hype of the season has passed, you will be left with a huge bill. The interest payments on your loan will mean that you end up sending significantly more than the loan amount itself, and if this was taken out with a short-term loan provider, the APR could be in the thousands. As such, always stick to your own money over Christmas – your loved ones would rather you be financially secure than get a bigger present.
  3. Watch your credit card payments
    As well as never taking out a loan just for Christmas expenses, it is also well worth considering how much you are putting on your credit card. While the interest payments will not be as high as through a payday loan, there is still additional interest to pay, with significant consequences if you are unable to pay on time. Instead, use the money you have put aside throughout the year to cover these costs.

At Overdraft, we pride ourselves on offering everyday personal finance tips for our readers.

Written by Andrew Shearer

Copyright Io4 UK Limited

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