Planning ahead can reduce the cost of Christmas | Personal Finance | Finance

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The average household will spend a whopping £1,551 over the festive period

You have exactly two weeks until Christmas Eve and the longer you put things off, the more money you are likely to throw away in a panicky last-minute splurge.

The average household will spend a whopping £1,551 over the festive period, according to American Express, so plan ahead to make sure you do not have a financial hangover in January.

CHRISTMAS LIST

Your first step is to draw up a list of the things you need to buy, including food, drink, gifts, decorations and travel costs.

Helen Dewdney, founder of consumer website TheComplainingCow.co.uk, says this will put you in control: “It will stop you panicking, overspending and wasting money on unnecessary items.”

Millions start their Christmas food and gift shopping online and Dewdney suggests maximising discount vouchers and codes: “Search for the store you are shopping from alongside the words ‘discount’ or ‘voucher code’. The bigger stores usually have a range of offers.”

Do your shopping via cash-back sites such as TopCashBack.co.uk and Quidco.com or KidStart.co.uk, which sends cash-back to your nominated child’s bank account.

“Sign up for free and use whichever site gives you the biggest cash-back on a particular purchase,” says Dewdney.

The Google shopping tool lets you compare items at different stores, or use price comparison sites such as PriceRunner.co.uk and Idealo.co.uk.

“Sign up for emails to get the best offers first, many will email you early with discount codes,” she adds.

When shopping online, always watch for hidden costs such as shipping and check returns policies in case the recipient needs to change it due to sizing.

Avoid scam sites and check your online payment is secure by ensuring the website address starts with https:// and has a padlock symbol in the address bar.

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Christmas is a good time to cash in any loyalty points you have accumulated

FESTIVE FUN

Darren Williams, marketing manager at PromotionalCodes.org.uk, says now is a good time to cash in any loyalty points you have accumulated on store cards over the year: “If you do not have any loyalty cards, apply now and gain points on your Christmas spending.”

He also suggests checking out local Facebook selling pages and eBay vendors in your area: “You could get great quality goods for very little, with no postage and packaging costs.” Christmas is a time for fairy-lights and fun family treats, so do not be snobbish.

“Nobody can tell the difference between budget and luxury brands for Christmas dinner or snacks so don’t throw away money trying to impress,” adds Williams.

You should also avoid impulse buying: “Stick to your plan and ask yourself why you are buying something and whether it fits your budget,” he says.

If hosting Christmas dinner, estimate how much food and drink you will need for your guests says Simon Ripton, head of savings and loans at Ikano Bank.

“Suggest everyone brings an item of food themselves, as this should split the cost and you get more time with guests rather than labouring in the kitchen.” 

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37 per cent of us are putting Christmas on credit this year

SHUN DEBT

Worryingly, 37 per cent of us are putting Christmas on credit this year, up from 33 per cent last year, as wages stagnate, prices rise and money gets tighter.

Someone who put the average £1,551 Christmas spend on a credit card for a year could pay £200 in interest, or £960 in overdraft charges, according to figures from Hargreaves Lansdown.

Personal finance analyst Sarah Coles says: “Nobody wants to cancel Christmas, so it is hardly surprising many turn to credit.”

She suggests a number of cost-cutting strategies such as talking to your family and agreeing not to buy presents for some people: “The easiest approach is to buy just for the children.”

You could arrange to see friends after Christmas and exchange gifts then.

“Buy them in the sales with your December pay cheque or re-gift any unwanted presents,” suggests Coles.

Consider a Secret Santa with friends or colleagues so you only need to buy one gift each, she adds. Christmas will be an even more wonderful time if you focus on the things that really matter such as family and friends, and avoid racking up debts buying stuff none of you really need.

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