Christmas can challenge anyone’s finances with the presents to buy, the food and perhaps a tree and decorations. Sadly, in an attempt to make Christmas the best that it can be, many people stretch themselves too far and end up struggling to pay for the festivities for the rest of the year. It really helps if you organise your finances in advance and you will certainly enjoy your shopping and the entire festive season more if you have the money to hand when you need it.
Christmas Clubs
Many people turn to Christmas clubs which are heavily advertised on television, usually just after Christmas when consumers are feeling the pinch the most. With such clubs you make payments throughout the year and then in the run up to Christmas your funds are released so you can get on with your shopping. The schemes are run by a variety of organisations including retailers, community groups, the Post Office, and specialist Christmas club companies. Clearly starting some form of regular saving has to be a boon but there are downsides to these clubs.
With the majority of such savings schemes you receive your funds in the form of gift cards for stores or credit to spend on a range of websites. This restricts you to specific retailers which is fine if everything you need can be purchased from them but what if you need to shop elsewhere? In addition your money will only be released late in the year so you could miss out on many great deals along the way. You don’t accumulate interest on your savings and your money is locked in until the release date preventing you from using it in an emergency. Christmas clubs are not covered by the Financial Conduct Authority and so if the scheme collapses you will not receive compensation. Some are voluntarily members of the CPA (Christmas Prepayment Association) which has a code of conduct so it is wise to choose one of these clubs if you wish to go ahead.
The Banks
A savings account with a bank might well be a better alternative. Your money is safer, you have much more flexibility and you will receive interest on your savings. This way you can save as much or as little as you wish each month and take your money when it suits you. You can spend it anywhere you please meaning that you can buy from independent businesses, specialist businesses, interesting gift retailers and even from overseas. You may need a little more self-discipline to prevent you from raiding your savings but the benefits are clear.
Year Round Shopping
Another approach you could take is to shop for the things that you need throughout the year. This way you take advantage of sales, special offers and one off opportunities. Ironically some of the best deals for Christmas decorations, cards, crackers and the like appear in January when you are just trying to recover from the last Christmas. Grabbing deals whilst they are there will save you a fortune and shopping throughout the year will spread the cost nicely for you.
The Expense of Christmas can be managed effectively and getting on top of the finances will help to make the season feel much more enjoyable. Savvy shopping will mean that you spend less overall too so you have every reason to take an organised approach to the celebrations.
Article by Sally Stacey