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For most people, the Festive Season is a time of fun and festivity. But for many others, it is a time of apprehension.  Some overspend ending up deep in debt making the start to the New Year a miserable one.  At this time last year, a consumer report found that over 13 million people were still repaying bills from the previous year’s Christmas break. That’s just plain wrong. It’s lovely to be generous, but it is dangerous to enjoy the festive season at the expense of your financial well-being.

If it’s not too late, now is the time to put a plan in place for your seasonal spending. With some purpose and careful management, you can sail through the season and make it to 2015 with minimal festive debt hangover. Here are five mistakes to avoid:

Going shopping without a plan

This can be recipe for disaster. For a start, who are you shopping for? And what do you intend to buy? Have you ever gone shopping for others only to return with loads of wonderful stuff for yourself? And then trying to justify it by saying that you desperately needed it all anyway? Don’t try to fool yourself. Shopping without a plan is like travelling without a destination. You’ll end up wondering around in circles frustrated, disillusioned and broke. Best spend a few minutes planning the Who, the What and the How Much before hopping on the train to the West End, Bluewater or Westfield.

Shopping spreeRelying heavily on credit cards

I once heard a conspiracy theory that when John Biggins invented the credit card, he designed them specifically to give the impression that the money being spent was someone else’s! That’s why the Bank’s logo is so prominent and your name so small. In a sense, it is true – in using a credit card, you are spending the Bank’s money. The only caveat is that you have to pay it back with interest! When you reach for your wallet for Christmas purchases, use cash or a debit card and monitor your bank account to ensure that you don’t become overdrawn. By constantly monitoring your spending and using cash or debit cards instead of credit cards, you could avoid debt and chances are you will also spend less when you shop.

Spending without a budget limit

Deciding on a budget limit  before and during the festive season is essential if you are to avoid going bust. Do this by taking into account what resources you have, such as your income and savings and then deciding how far into those resources you are willing to dig. Once you have come up with a number, that’s it. Easy, right? Wrong! The hardest part is sticking to it! The best way to stick to a budget limit is to withdraw it in cash as stated above, and then discipline yourself not to spend any more than that.

Eating out at every opportunity

You will be invited out over the next few months to countless after work parties and celebratory meals. Learn to say NO! Choose carefully which ones you attend because eating out will not only make you fat, it will knock out your budget. Challenge yourself to eat in, if only for the festive season.

Forgetting what the season is all about

It can never be said too often but Christmas should be more about caring than about credit cards. Put your emphasis on having a good time with friends and family and giving people who need it the gift of time, which is far more precious than the gift of presents. As a result, your festive season will be less stressful and you’ll have a happier New Year, hopefully in a stronger position to take advantage of those dreadful January sales! Don’t get me started on that!

Akwasi Duodu, Independent Financial Consultant

Sterling & Law Group plc.





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