Christmas can be a wonderful time - but for most people it can be the most expensive.
Older people on fixed incomes can find the celebrations particularly trying, and getting caught in the trap of spending more than they can afford is distressing for people of limited means.
One of the big arguments against scrapping the Winter Fuel Payment and incorporating it into the state pension is that many people use the money not just for their heating when the weather is cold but for other expenses during the festive season.
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A survey for Channel 4’s Dispatches programme found that 18% of pensioners spend their winter fuel payment on food, holidays and Christmas presents.
And the Money Advice Trust, the charity that runs the National Debtline free debt counselling service, says one in 20 Britons (an estimated 2.3 million people) have already missed, or expect to miss, a payment on everyday household bills in order to fund Christmas spending.
Alarmingly, this includes people falling behind with ‘priority debts’ including rent, council tax and energy bills.
So, how can you avoid the Christmas spending trap? Here are eight ways to keep spending under control:
1. Make a Christmas spending list
In fact, make two. Make one list of the people you need to buy present for, and another for food. Have a budget for each.
Take your list with you whenever you go out, and avoid the mistake of shopping like a demented magpie and ending up with three gifts for one person and nothing for someone else.
According the Money Advice Service we spent nearly £2.4bn on food, drink or presents last year that eventually went to waste – because they were unused, unneeded or unwanted. This equates to an average spend of £28 per person on discarded food and drink.
Thirty-seven per cent of people surveyed said they received presents which they didn’t use, with an average value of £54.
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2. Research before you start spending at Christmas
Do some research online on how far your budget will stretch if your gift recipients haven’t given you hints about what they would like, and apportion your funds accordingly.
The same goes for food shopping. It is all too easy to go round the supermarket filling your trolley with Christmas goodies that you think you ought to “have in”.
The shops will be open on Boxing Day and, in some areas, on Christmas Day itself. Resist the temptation to hoard food as if for a siege.
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3. Avoid over-spending on 'surprise' visitors at Christmas
Cater for any entertaining that you know you are going to do. Add a box of biscuits for casual callers - and forget the extra mince pies, nuts and brandy butter than no one actually likes.
How many people are likely to call at your home unannounced and expect to have a fully catered service? Could the answer be “none”?
The biscuits can be your safety net if you are really nervous about the neighbours dropping in - and a treat for you in the New Year if no one comes round unexpectedly.
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4. Be wary of gift vouchers when spending at Christmas
If the shop or store chain collapses, holders of vouchers could be left out of pocket as they become unsecured creditors and bankruptcy administrators are not usually obliged to honour payment.
If you must buy a voucher make sure it is one offered by several – unlinked – retailers, so if one goes out of business the voucher can be spent at another one. If you receive a voucher as a gift, spend it as soon as possible.
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5. Shop with a credit card for more protection
If you use a credit card you are protected by Section 75 of the Consumer Credit Act if the retailer defaults.
You also have different rights if you pay with a debit card which in many circumstances are superior to paying with cash or a prepaid card.
6. Pay your credit card bill in full
Don’t use paying with a credit card as an excuse to overspend. According to the Money Advice Service (MAS), four million people are still paying off their credit card bills from last Christmas.
Credit cards are useful for consumer protection and for budgeting, but if you overspend they are the route to a debt spiral
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7. Never take out a payday loan to pay for Christmas
If taking on credit card debt that you could have difficulty repaying is bad, then taking out a payday loan is worse. MAS found that 1.4 million UK adults will rely on payday loans this Christmas. Don’t be one of them.
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8. Be wary of fraud when spending at Christmas
Christmas is a time for giving – and a time for taking by unscrupulous fraudsters. When buying online buy only from the genuine websites of reputable retailers. If you find a deal that looks too good to be true, it probably is.
The anti-scam organisation Action Fraud has published a leaflet for advice on keeping safe when shopping over the festive period.
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