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Avoid a Christmas Debt Hangover

help to budget at christmas
Ideas to help manage the cost of Christmas

It’s easy to overindulge during the Christmas period. It’s the holiday season when people tend to relax more and enjoy spending quality time with family and friends, making memories and having fun. But as the pace of life slows down, the rate of spending tends to go up!

As well as overdoing the mince pies and mulled wine, many people overspend on gifts and treats, maxing out credit cards in the process. Although some will have a clear plan of how they’ll repay their debts, many people don’t.

If this sounds familiar, why not try to avoid the Christmas debt hangover this year? There are steps we can all take to spruce up our festive finances without being too frugal. Here are a few ideas you might want to try this Christmas and in the future:

Ideas for this year

  • SET A BUDGET AND STICK TO IT - Before you spend anything, know exactly how much you have to spend, and don’t go over this. It can be hard, especially if you see something you know a friend or family member would love. But if you can keep to your spending limits, you can help make sure you won’t fall into debt.
  • DON’T BORROW MONEY IF YOU CAN AVOID IT - Taking out extended credit agreements with retailers or using store cards often means you may end up paying much more for your goods than you realise. Even the best buy-now-pay-later deals end, so only use them if you know you’ll be able to pay them back before the higher rate interest charges kick in. Be extremely wary of ‘payday’ loans. Many people with serious debt problems say these types of loans were a major factor in creating their debt issues.
  • DON’T PAY FOR CHRISTMAS WITH YOUR CREDIT CARD unless you can afford to clear the balance in full when the statement comes in. If you have to use a credit card, shop around and find the best deal available. All providers charge different interest rates, but some also have incentives like interest-free periods or discounts. Price comparison websites could be useful here.
  • AVOID GOING INTO OVERDRAFT - Avoid going into any bank overdraft, especially if it is unauthorised, otherwise you could incur some additional interest and charges. Speak to the bank first if you think you might need to do this.
  • THE ONE GIFT RULE - How many gifts did you get last Christmas that you didn't really need or want? Agree on a one gift rule with family before the big day, set a budget and ask for ideas. If each family member commits to buying for one person, it means everyone gets one gift that they really love.
  • SELL UNUSED GIFTS - Got any gifts from last year that are gathering dust in the back of a cupboard somewhere? List them for free on websites like Gumtree. People can search within their local area and will collect direct, saving you online payment fees and the hassle of having to package items up and take them to the Post Office.

Ideas for next year

  • BUY IN THE SALES- The sales seem to start earlier each year, with some even starting on Christmas Eve. Take advantage of bargains that don’t have a use by date and won’t need to be returned. The trick is to only buy what you know the recipient will appreciate and don’t buy items just because they are cheap. Great for starting an affordable ‘gift stash’ that can be used for birthdays, etc at any point during the year.
  • SAVE FOR CHRISTMAS THROUGHOUT THE YEAR - Save what you can, when you can. Putting away a few pounds each month to spend in December is easier than having one huge outlay that puts you into debt. Perhaps setting up a dedicated bank account purely for Christmas might be the way to go?

We hope that some of these ideas might work for you. However, we appreciate that Christmas is a time when people feel under huge pressure to spoil their loved ones, often spending more than is affordable.

If you are struggling with debt or worry that this Christmas could be the tipping point for your debt problems, please contact one of our advisers for more information. We’re always happy to help you find the right solution to deal with problem debt.


Ian Brown

Senior Insolvency Manager

Phone: 01383 628814

Mob: 07519 124657

Richard Gardiner


Phone: 01383 628828

Mob:    07872 376105

Maureen Walls

Insolvency Manager

Phone: 01383 628812

Category: Debt Problems

About the author

Ian Brown

Ian Brown

Ian is an expert in the Debt Arrangement Scheme and Business Debt Arrangement Scheme, assisting individuals, sole traders and partnerships.

He also advises on personal debt solutions recommending the best option to resolve problem debt issues.

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