Don’t let overspending take the “sparkle” out of Christmas

To help people manage their Christmas spending better the OFT has produced the “12 Ways of Christmas”. Copies can be obtained from the OFT at its office in Lord Street Douglas, telephone 686500 or from its website www.gov.im/oft.

Chairman of the OFT Bill Henderson MHK said “There are always financial and social pressures on people at Christmas. The economic climate this year is likely to compound these.”

Mr Henderson continued ”The Office has produced the “12 Ways of Christmas” to provide consumers with practical tips on how to make their money go further this Christmas. Using you money wisely ensures that you’re less likely to overspend and have to face big credit card bills in the New Year. It is easy to overspend but by using the “12 Ways” you can prevent a lot of grief for yourself and family come January. Don’t feel pressurised to buy and buy. Don’t be worried what others are doing, especially other family members. I know it can create enormous pressure on people to ‘keep up with what others are buying’. Put the brakes on. If money is tight, tell your family and friends. It saves the heartache of a stressful New Year when ‘the bills come in’. Please be careful - don’t get carried away”.

“12 Ways of Christmas”

The First way - Plan

Be realistic and budget accordingly. Christmas Shopping on impulse is dangerous, so make an old-fashioned shopping list and stick to it. Shops spend a fortune on targeting impulse spending – having a list will help you beat this and stay focussed. Remember that rent, mortgage, utility bills and food bills and other existing debts still have to be paid – the consequences can be severe if they are not.

Second – Think twice before you pay the price

If you can afford to pay for your goods outright by cash, cheque, or debit card do so, don’t be tempted into expensive Store Cards. You might get a discount on purchases at the time but the interest on these cards can be extremely high. Research has shown that we spend a third more if paying by card than when we use cash. You can find out more about borrowing money in this way on the OFT’s website www.gov.im/oft

Third – Variety is the festive spice

Shop around to compare prices in different stores. If you are going to use a credit card, shop around and compare terms. Some cards charge high interest rates, but provide interest free periods or discounts. Budget for all these costs and put the payment dates in your diary to make sure you pay on time, even if it’s only the minimum, or you will be faced with additional charges. You can find out more about managing your money on the OFT’s website www.gov.im/oft

Fourth - Buy safe to be safe

Don’t be tempted to buy from traders you don’t trust and don’t borrow from unauthorised lenders. The initial savings and convenience may prove to be a false economy. Check for hidden extras in any credit agreement. Work out the total amount payable. Ensure that the monthly instalments are within your budget before signing. Interest free credit can seem attractive, but if you don’t pay on time, or miss a payment, you could have to pay a lot more. You can find out more about borrowing money in this way on the OFT’s website www.gov.im/oft The website also contains advice on avoiding buying counterfeit goods.

Fifth – Having fun

Holiday fun can get expensive: from going out to dinner with visiting friends and family to going to Christmas shows and events, you'll be spending a lot. Try a few holiday activities that cost little or nothing yet still are extremely enjoyable such as competitive board games like Monopoly and Cranium, having friends around for Wii Christmas Sports or having a DVD film night are just a few ideas.

Sixth – Don’t throw away receipts

Ensure you keep receipts for the goods you have purchased. Some shops change their returns policy at Christmas so ask before you buy. Many stores have post-Christmas sales and without a receipt you may find that you will only be reimbursed the sale price rather than the full price paid before Christmas.

Seventh – Share the cost of Christmas

If you are savvy arrange to do your food shopping with like-minded friends. Take advantage of buy 1 get 1 free offers and exchange the surplus items you each have after the checkout. Also when buying gifts take advantage of 3 for 2 offers on gifts but remember something is not a bargain if you don’t need it!

Eighth – Returning unwanted gifts

Unfortunately you have no contract with the retailer which means that you cannot force them to accept the goods back. However, also bear in mind that the shop would be under no legal obligation to receive the goods back unless they had made this a term at the contract of sale. Some retailers will offer credit notes or an exchange if the goods are rejected in perfect condition and if proof of purchase is provided. The law would not require them to do so unless they had made this specification at the time of sale, or their stated shop policy offers such extended provisions. Ask for gift receipts where possible. You can find out more about your shopping rights on the OFT’s website www.gov.im/oft

Ninth – Don’t forget your vouchers

Treat gift vouchers or cards like cash and make sure to use them before they go out of date. When choosing them, buy from a reputable company as, if it goes bust, the vouchers will be useless.

Tenth – Secret Santa

It’s an old tradition but a good one! Amongst your close friends or even family members agree to set a budget eg £10 or £20 per present and secretly draw names out of a hat for who needs to buy for whom. This way you only buy one present for the group rather than several. A way of making this even more effective is when you have agreed on the amount you are going to spend is for each person involved to make a “wish list” of several items they would like and give it to the others involved. This ensures that everyone gets something they want or need and can take some of the stress of trying to find the perfect present.

Eleventh – Cards and Wrapping

Consider buying wrapping paper, tags and cards in the final week before Christmas where possible. Often retailers will start discounting these items at this time to clear stock. Also consider recycling your cards in a different way this year. Instead of taking them to card recycling sites why not bring out your creative talents and recycle them into gift tags for next year. This will have the added bonus of saving you money on tags next year.

And finally ……. The Twelfth Way - Start planning and saving for next Christmas

The best time to start saving for next Christmas is straight after this one. The average family spends £600 – spread over the year that’s just £50 per month. Too many people pay for Christmas with December’s income. Consider opening a regular savings account to help you to keep your savings separate from your income giving you less temptation to spend and earning you interest at the same time. You can find out more about planning for Christmas on the OFT’s website www.gov.im/oft

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