Christmas advice from Credit Action for handling your finances at the most expensive time of the year.
- Make a budget and stick to it. It may not be much fun, but take some time to work out what you can afford to spend this Christmas. Tools such as the Spendometer can help you track your outgoings to ensure that you stick to your budget.
- Live in cash. If you only take as much cash as you’ve budgeted for to the shops, then you’ll never spend more than you can afford to. If there’s something you see that you really want to buy, then you can always go and get the money for it later, giving you some cooling-off time to think it through properly.
- Don’t believe the adverts. Is spending an extra few quid on that embellished DVD box-set or revolutionary new shaving kit really going to transform anyone’s life for the better?
- Get crafty. Can you give someone something you’ve made rather than something costly that you’ve bought? One of my best presents of the last few years has been a knitted scarf from my Grandma!
- Check your balance. Lots of people have no idea how much is in their bank account even though they can check it at the touch of a button. If you know how much is there, you’re less likely to overspend and end up relying on credit.
- Think ahead. Don’t just put together a December budget, do one for the following couple of months too. It’s all too easy to plan to get as far as January 1st and then find yourself in a credit black hole.
- Work out the total cost of credit. Make sure you understand exactly how much your borrowing is going to cost. Is what you’re buying really worth it once you’ve worked out this total?
- Work out price in £’s not just %s. Percentage APRs on credit can be confusing - make sure you ask any lender to explain the cost to you in good old pounds, shillings and pence.
Chris Tapp, Director, Credit Action
Credit Action is the national money education charity dedicated to helping the public understand and manage their money well. This includes helping people with the day-to-day practicalities of budgeting as well as aiding their understanding of financial products, allowing them to save, spend and borrow responsibly. www.creditaction.org.uk
