How are you paying for Christmas?
It is now just over 6 weeks until Christmas- that time of goodwill to all men where, instead of just going around giving other people (free) goodwill, we all have to spend loads of cash buying tat for Aunty Pat.
But whether you agree with the commercialisation of Santa’s birthday or not, chances are that Christmas will mean increased expense for most of us, and with a maximum of two monthly paydays between now and then, how are you going to pay for it all?
Research by moneysupermarket.com suggests that actually, people are being somewhat more sensible with Christmas spending than they may have been in previous years. This year, 38% of us are planning to use ‘disposable income’ and a further 24% will use savings, up 11% on last year. What’s more, a further 10% of people have sensibly put aside money every week in a savings scheme specifically to help pay for the festivities.
All good news. In fact, only 10% of people say they will spend on credit or store cards this year, and only 3% will use an overdraft. Perhaps people have decided they don’t really need that 57” flatscreen HD 3D television after all. Or maybe they bought it last year.
The full breakdown of Christmas funding is as follows:
I'll dip into savings - 23.7%
I'll use my disposable income - 38.1%
I'll use my credit card/store card - 10.5%
I'll have to use my overdraft - 3.2%
I have been saving up all year via a savings scheme - 9.7%
I'll borrow money from friends and/or family - 1.6%
Unsure or don't know - 4.6%
I don't celebrate Christmas - 8.5%
Kevin Mountford, head of banking at MoneySupermarket even has some handy tips for the don’t-knowers and those who may be worrying about spiralling costs: "For those who haven't done so already, it's not too late to start saving for Christmas this year- just setting aside twenty pounds each week over the next few weeks could save you from skating on thin financial ice and help prevent sole reliance on your December salary to pay for everything.”
And for those using the never-never to pay for their fairytale Christmas, it may make sense to use a cashback card, like the American Express Platinum Cashback Card which offers 5% cashback on your first £2,500 spend within the first three months, which could then give you money to put towards next Christmas, and may offer a more competitive interest rate. Or, if you can get hold of a 0% on new purchases card, at least your January hangover will only be paying off the value of purchases, rather than being compounded with hefty interest charges.
So what do you think? Are you planning to cut back this year? Have you put a bit aside for jollities or are you bending that plastic as hard as ever?