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Avoid Christmas borrowing become problem debt with our ABC!

Posted 26 November 2015

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Christmas, it’s all about spend, spend, spend these days, isn’t it? Well, it can certainly seem like it, especially if you don’t have very much cash to splash on your loved ones this festive season.  Like many people, you might be planning on relying on credit cards or other forms of borrowing to see you through the festive period.  But how can you ensure that this year’s borrowing doesn’t become a next year’s problem debt?

You could, of course, indulge to your hearts content – it is Christmas after all. But while it might feel great at the time, the hangover may strike when January comes and the bills start hitting the doormat.  


Use this simple ABC to keep your finances under control this Christmas. 

A – Allow for essentials 

This is one of the number one rules for making sure your Christmas goes off without a hitch. Before you buy the presents, booze and crackers – make sure you have the money for all your essentials safely put to one side. After all you don’t want your gas going off on Christmas day, just as you’re about to put the turkey in the oven, because you spent the gas money on Uncle Dave’s aftershave set! This is an exaggeration, but it highlights that spending money on non-essentials when you have a tight budget can lead you into financial problems if you’re not careful.  

So before you even think about Christmas, make sure you’ve put aside enough to cover your council tax, mortgage/rent, electricity and gas bills, as well as food, travel and essential living costs. And, once you’ve cleared your priority debts and essential bills, you need to think about the non-priority ones, such as credit cards, personal loans, that really should be paid before anything else. 

Once you’ve done this you can think about what you’d like to indulge in with the money you have left – your disposable income.   

B – Budget carefully

Preparing a budget is one way of keeping an eye on the money you have coming in and going out of your account all the time. But it can be really useful at Christmas, when you have a lot of extra things to buy. 

If you don’t already do this for your everyday spending, it may be something you want to try. If you’re not already struggling with problem debt, it can prevent you from getting that way. And, if you are starting to struggle, it can help you start to get back on track. The first step in this process is to run a check on your finances to see where your money currently gets spent. An effective way to do that is to keep a spending diary, we have a blog about this subject –

So, back to your Christmas budget. Once you know what you have left, after all your essential bills have been paid, you can then start your Christmas list, include everything you need to buy and how much you’re prepared to pay for it and stick to it! This should help you stay in control and prevent you being caught up in the clever marketing that aims to make you overspend at Christmas. 

C – Cut-back on Christmas

There was time when you could only get your posh Christmas morning smoked salmon and buck fizz by splashing out for it. Now, thankfully, times are a changin’. With the rise of shops like Aldi and Lidl, you can get all those bits you love to treat yourself with at Christmas for much, much less. So even if you are on a budget, there’s no need to miss out on a wonderful festive feast. 

You could also decide to put an upper price limit on the presents you’re going to buy for your loved ones. This way you don’t get tempted to spend more than you should, just because you’ve seen something that you think will be perfect for Aunty Jane. 

If you don’t want to compromise on the quality of the gifts you buy, why not see if you can get hold of the things you’re looking for in shops such as TK Maxx? That way you can get people what you’d like to give them at a price that works for you.

Be Disciplined!

We know it’s tough when there are just so many tempting offers and wonderful things promising to make your Christmas magical. And, ‘it’s Christmas, treat yourself!’ has to be the most over-used excuse for overspending! So if your Christmas budgeting plan is going to work, you need to be disciplined. If you find yourself being drawn into spending more than you should, step back, take a deep breath and ask yourself whether it’s really worth jeopardising your budget. Think about how you’ll feel when the bills start to arrive next year.

If you’re already struggling

If you’re already struggling with your money each month, you may find it useful to speak to a trained debt advisor. You can chat through your current situation and then discuss what solutions there are to your problem. There are lots different debt solutions, depending on whether you want a formal or informal arrangement and how much problem debt you have. You can see all the debt solutions we have on offer. If you’d like to chat to one of our advisors now, just choose one of the ‘contact us’ options on the left of the page to get started.     


by Shelley Bowers

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.