ONE IN FIVE HAVE TAKEN A LOAN OUT TO PAY FOR CHRISTMAS
- On average, it takes two and a half months to pay off Christmas debt
- More than a third (38%) of UK parents have taken on a financial burden to keep the magic of Christmas alive for their children
More than one in five (22%) UK adults have taken a loan out to pay for Christmas, with it taking on average two and a half months to pay off the holidays, according to new research from savings experts Raisin UK.
The big day undoubtedly takes its toll on wallets and purses each year, with many finding themselves stuck in a dangerous cycle of expenditure and debt. In fact, almost a quarter (23%) have used a credit card this year, the same number as those who used one the year before.
One in eight (12%) have used Buy Now Pay Later schemes (same as 12% the year before), 9% used the last payslip (10% in 2020), and 11% have relied on vouchers (12% in 2020). Meanwhile, 38% of parents across the country will take on a financial burden to afford to keep the magic alive for their children.
Hoping to break the cycle, and make sure the same poor financial decisions are not repeated once again, Kevin Mountford, co-founder of Raisin UK, offered the following guidance:
Split it over paydays – If you set a budget and look to split this over your remaining paydays, you may not feel the burden as much just before Christmas. For example, taking £75 out of your pay packet for the next 2 months is an easy £150 to put aside for presents.
If this isn’t enough, look more towards the future. Every month set aside £50 for 11 months, which means you will have an extra £550 for Christmas in 2021. Less stress.
Save on food cost – Think about what you’ll need in advance, have a shop around, and see which supermarkets are doing the best value products. Items with a longer shelf-life such as Christmas chocolate and mince pies are far cheaper in the run-up to Christmas, so get buying now if you can.
You could also use gift cards or shop around for discounts when it comes to food and drink – we know that the alcohol side of things can rack up the price of Christmas itself – but with so many discounts and offers out there at the moment, it would be silly to not use them.
Try micro saving – If you’re a fan of your high-street coffees, and festive favourites when it comes to Christmas sandwiches, at £5 a day that racks up over £400. By taking lunch to work and not impulse buying, you can put a wedge of money aside to pay for priorities in the run-up to Christmas.
Regifting – Controversial or not, there’s nothing wrong with regifting presents if money is tight this year. Having a sort out and finding things that would be good to regift could save you buying those last-minute corner shop gifts for your partner’s workmates, or your second cousin’s third cousin.