Online shopping at Christmas time

8 Tips To Avoiding Christmas Debt

At East Dunbartonshire Citizens Advice Bureau in west-central Scotland, we are here to help. If you live or work in the East Dunbartonshire area, we can give you personalised advice on money, debt, budgeting and more. Please contact us herechat online or call us on 0141 775 3220. If you reside outside of East Dunbartonshire, please contact your own local Citizens Advice Bureau for assistance. Find them here.

Avoid getting into debt this Christmas

Christmas debt is a serious problem in the UK. A third of people in Britain borrow money each year to buy Christmas presents. This is nearly 17 million people. 2.3 million people will miss a regular payment of rent, electricity or another vital service in order to pay for Christmas. 

Debt problems are made worse near Christmas thanks to unyielding pressure to buy from all corners. But it doesn’t have to be like this. Here are some options to help make sure your Christmas isn’t spoiled by debt.

1. Prepare in advance

If you want to spend money on presents, try not to spend it all in one or two months. Plan throughout the year and save what you can, when you can. It’s easier to put a few pounds aside each month to spend in December than have a huge outlay one month that sends you into debt. Perhaps set up a dedicated bank account purely for Christmas. You’ll be surprised how much a few pounds each month builds. As early as possible, start looking to maximise your income and learn where you are losing money. Start here with our income maximisation survey:

Income Maximisation Service webropol QR

2. Set a budget

Before you spend a penny, know exactly how much you have to spend, and don’t go over this. It can be hard, especially if you see something you know a friend would love. But if you can keep to your spending limits, you can help make sure you won’t fall into debt.

When setting a budget, don’t forget that you still need to pay your regular monthly bills, such as rent, mortgage, utilities and food. Make sure you put enough aside each month to cover these. Try using a budget calculator like this from Citizens Advice Scotland. 

Then, with your budget set, make a plan of what you need to buy and how much you want to spend. Don’t be tempted to go over this limit or you may end up spending more than you have. 

Budgeting at Christmas, with shopping list, pen and calculator

3. Be wary about borrowing money

Don’t be tempted to take out extended credit agreements with retailers, unless you are sure they really do work out cheaper. Otherwise you may be paying much more for your goods than you realise. Even the best buy-now-pay-later deals end, so only use them if you know you’ll be ready to pay them back.

It can also be expensive to go into any bank overdraft, especially if it is unauthorised. So speak to the bank first if you think you might need to do this. 

Similarly, try not to rack up a lot of Christmas debt on any credit card, unless you are able to pay this debt off in full next month. If you do need to use a credit card, shop around for the best deal. Cards all have different interest rates but some also have interest-free periods or discounts. Price comparison websites can help you as a guide.

Make sure you don’t borrow from any unauthorised lenders. Whilst it may be convenient to get cash in your hand quickly, the high interest rates lead to a false economy. 

4. Shop ahead

Get ahead with your Christmas shopping. Start early in the year collecting bits here and there. This way when December arrives, you will have a bank of presents ready to go, and all without the financial pressure of having to buy all at once.

Christmas gifts in a bag

5. Shop smart

Be smart when you shop. Don’t buy the first thing you see. Shop around. Is it cheaper online? Do other shops sell the item for less? You can also look in charity shops. Many items you’ll find here are in pristine, unopened packaging as they were duplicates or bought in error. Not only can you save a bundle, but you’re also helping a charity too. 

Also, keep in mind the tricks that shops often use to get you to part with your cash. “Buy now pay later” is a very tempting offer, but it’s only putting off the inevitable. Sometimes, you’ll even pay more with interest added. Don’t get sucked into payment schemes you can’t afford to keep up. 

Another good tip is to have a gift backup plan for each person. Use it if you can’t find the gift you are looking for. By having another present in mind, it will be harder for you to buy something expensive on the spur-of-the-moment.

6. Buy from shops you trust

It can be tempting to buy from places that offer cheap prices. But beware that Christmas is when a lot of scammers are at work. If you are buying from places like Facebook Marketplace, be sure you trust whoever is selling and try to see the item first. 

In stores, if you do take out extended credit agreements, read the small print or get someone you trust to do so. Interest-free may seem like a good idea, but if you miss a payment it can often work out costing you a lot more. 

A man working through his credit card statmen and Christmas debt

7. Make, don’t buy

People will very often appreciate a homemade Christmas gift much more than a generic shop-bought present. The problem is when people hear “homemade”, they think cheap and tacky, but it doesn’t have to be! If you usually buy someone expensive flavoured gin, why not get creative and infuse your own flavour?

Hamper baskets are a popular (and expensive) gift, so why not make your own hamper for a fraction of the cost? That way, you can include only the things you know the person on the receiving end will like, reducing waste. They don’t even have to be just food – who wouldn’t like a homemade toy hamper with things like this i-spy game in it?

8. Speak to us

The key to staying out of debt after Christmas is to stay within your budget and only spend what you can afford. However, there are always pressures that can make it difficult to do this. If you would like any further advice on debt management or how to manage your Christmas money, your local Citizens Advice Bureau can help. We are totally judgement-free and are here to help you out. The longer you put off facing up to debt problems, the worse they will get. So don’t let Christmas debt take over your life – get in touch with us today and let’s start talking. 

East Dunbartonshire CAB is here to help

If you need any specific advice on money, debt, budgeting and financial issues, your local Citizens Advice Bureau can help. Residents of East Dunbartonshire can contact us herechat online or call us on 0141 775 3220. If you live outside of East Dunbartonshire, you can find your local CAB here.

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