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Should you already be saving for Christmas?

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A third of Brits will start the New Year in debt after an expensive holiday season, according to the Money Advice Service (MAS). Can planning ahead help you avoid the debt trap?
Should you already be saving for Christmas?

Jane Symonds, money expert at the Money Advice Service, says: “Christmas can easily turn from an exciting time with the family to a big financial stress. If you haven’t already set a budget, now is a good time to take control of your spending. It’s important to know that you don’t have to live beyond your means to make it a fun time, especially if you plan well in advance.”

Here are five tips from the MAS for making the festive season a little more affordable:

Fix your budget

Make a detailed list of everything you’ll need for the season, from presents and decorations to food, transport and alcohol. Build a realistic budget around this figure and keep a careful list of everything you spend so that you don’t blow it. Also be aware that you may need some cash reserves for those grim mid-January bills.

Top up your Christmas fund

Look for ways to cut your day-to-day spending in the months before the holidays and put the money you’ve saved into your Christmas fund. Limiting takeaways, bringing a packed lunch to work and swapping your morning latte for an instant coffee can leave you with a healthy chunk of change by the time Christmas shopping rolls around.

Keep an eye out for offers

Be open to shopping online or offline – the important thing is price. Watch for special offers and check for discount vouchers online and in newspapers. Always double check delivery costs to avoid a shock at checkout.

Borrow carefully

Think carefully about how you borrow extra cash. Using a credit card or extending your overdraft can have very different costs from provider to provider, but both are almost guaranteed to be cheaper than a payday loan. Planning ahead can help you find the best possible deal – by, for example, changing to a bank with a fee-free overdraft.

Resolve to start early next year

Christmas does come every year, and with that in mind it’s never too early to start saving. Open a savings account and transfer a set amount via Direct Debit every payday. You’ll soon learn to live without the money, and even a small amount will add up over the year. 

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