Avoid a Christmas Debt Hangover - Top Tips for Christmas Budgeting
Despite the best of intentions, many people get carried away at Christmas and spend too much money. This is a situation a lot of us find ourselves in to a greater or lesser extent and each New Year, the Isle of Man Office of Fair Trading sees an increase in people getting in touch asking for debt counselling help
At the time of writing (13th November 2014), there are only 42 days (or just two paydays!) until Christmas
To help make this Christmas less stressful and to help avoid distress in January when you realise how much you have spent, it’s really worth taking the time to do a little forward planning. The OFT has a few tips to avoiding headaches and stress about money. In addition, the Office has a series of interactive money management tools to help consumers.
The Top Tips and Money Management Tools can both be accessed on the OFT’s website www.gov.im/oft or from its office in Lord Street, Douglas, telephone 686500. People can also obtain copies of budget sheets from the OFT to help them draw up and keep an eye on their budget this Christmas.
If you find yourself in a situation where debt is a worry, tackling money problems early is always the best way to resolve problems. Debt Counsellors at the Office of Fair Trading deal with people from all walks of life and can offer support and guidance to those in financial difficulties. They can be contacted for confidential advice and support on telephone number 686510.
Contacts for further information/interview: Andrea Tabb, Advice Centre Manager - telephone 686565
Isle of Man Office of Fair Trading’s Top Tips for 2014 Christmas Budgeting
Tip One - Make a budget. Be realistic and budget accordingly. Work out how much you are going to spend on each person – and stick to it. Remember to include money needed for Christmas parties and events and also extra travel expenditure such as taxis. Total it up and this is your Christmas budget. You can find out more about budgeting and fill in an inter-active budget sheet on the OFT’s website http://www.gov.im/youngconsumers/tools/budgeter.aspx Avoid impulse buying at all costs – it is a sure-fire way to blow any budget!
Tip Two – Don’t forget everyday life amidst all the hype. Christmas is a very special time of year, but it is important to remember it is just one day. Don’t forget all of the rest – rent, mortgage, utility bills and other debts still have to be paid and consequences can be harsh if they’re not. Enjoy Christmas but ensure you get your priorities right.
Tip Three – Affordability, not desirability. Remember that most people appreciate the gesture and thought that goes into a gift rather than its monetary value. Many people agree to buy each other inexpensive, ‘jokey’ or consumable gifts, or have a ‘presents for the kids only’ agreement. These techniques can be useful to keep Christmas manageable and can also be a relief for other people. Remember – it isn’t a competition.
Tip Four – Say what you want. Present giving (often) works two ways, so it is a great way of getting things you actually need. Writing a present list isn’t just for kids and it is worth having a good think about it beforehand. When someone asks you what you want, you can then answer them easily and honestly. If you need new towels, say that you need towels. Do not feel that you cannot ask for things you actually need and do not feel bad for doing it. People that want to give you a gift will most likely appreciate you making things easier for them.
Tip Five - Flog it! – to help with Christmas cash. Before you decorate your home for Christmas, have a clear out. Are there unused, unwanted clothes or other items lying about that you don’t need and which can be sold? These can often generate a surprising amount of useful cash if you price them to sell. There are several local websites and webpages which can be easily used to sell items online. Car boot sales are useful and auction websites can maximise the value of unwanted items. Remember the old saying, “one man’s rubbish is another man’s treasure”. This could be a really useful boost to your bank balance and free-up some space at home too!
Tip Six - Small sacrifices can boost your health and your budget. From now until the big day consider think about what extra savings you can make. Consider walking to work if it’s possible and don’t buy your regular takeaway coffee or sandwich lunch. These small savings every day will add up and improve your budget (and maybe also your waistline) before Christmas! Also, that New Year health kick may then not be so difficult to achieve.
Tip Seven - Shop around. Try as many different places as possible to find the best price. Buy what you want and what meets your needs and not what other people say you should have. Be wary of extended warranties; the cost of a repair could be less than the cost of the warranty and remember you have consumer rights to reject goods that are faulty. 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 http://www.gov.im/youngconsumers/tools/
Tip Eight– Don’t throw away receipts. Keep the receipts for goods you have purchased. You will need this if it turns out there are any problems with your purchase. Also, many stores have post-Christmas sales and without a receipt you could find that you will only be reimbursed the sale price rather than the full price paid before Christmas.
Tip Nine – Returning unwanted gifts. Unfortunately, you have no contract with the retailer, the person who bought you the gift does. This means that you cannot insist that the shop accepts goods back merely because they are unwanted. Shops are under no legal obligation to receive the goods back unless they have a policy about returning unwanted items. Some retailers will offer credit notes or an exchange if the goods are returned in perfect condition and if proof of purchase can be provided. You can find out more about your shopping rights on the OFT’s website: http://www.gov.im/oft/consumers/
And finally … Tip Ten - Start planning and saving for next Christmas. Once Christmas is over, it’s a good time to start saving for the next one. Work out how much you have spent and divide it by ten. Start saving this amount in February. Then you should have enough saved up by November. Open a savings account to help you to keep your savings separate from your regular income, giving you less temptation to spend and earning you interest at the same time.
Extra Tip - Don’t Panic. If you find yourself in a situation where debt is a worry, tackling money problems early is always the best way to resolve problems. Debt Counsellors at the Office of Fair Trading deal with people from all walks of life and can offer support and guidance to those in financial difficulties. They can be contacted for confidential advice and support on telephone number 686510. Happy Christmas!