Why the heck do we spend so much on Christmas?
- Credit: Archant
There is a temptation to spend yourself broke at Christmas but take care, you could spend a long time paying for a happy Christmas.
How lucky I was to have children for whom the pinnacle of seasonal love was a Gameboy.
The early hand-held, battery-driven games console seemed expensive in 1989 but it was nothing compared to Christmas wish lists of young people in 2018. How do people get through it without incurring crushing debt?
A recent survey found that women are more likely than men to set a budget for Christmas, but are just as likely as men to bust it.
This is a surprise? I don’t think so... but it is how people fund the overspend that can lead to problems.
On one comparison website, annual percentage rates (APR) cited for a variety of short-term and (some) unsecured loans ranging from around 50% to a mighty 1698.1%. Many of the repayment sums quoted might seem reasonable but, of course, they are only manageable if you can afford them.
More than half (57%) of women budget for Christmas, compared with 46% of men, a survey from Hargreaves Lansdown found.
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It also found that men overspend by an average of £177.80 and women by £135.30 with men more likely than women to dip into their savings or overdraft to pay for overspending or put it on a credit card or store card. Women are more likely to cover any overspending with their disposable income than men. I suppose that could mean cutting back on other household expenses.
Women are also more likely than men to splash the cash on Christmas presents, spending £340 on average, while men typically fork out £278, according to the survey of more than 2,000 people across the UK. The research also indicates that people in Wales spend the most on Christmas presents, averaging £377, while people in the East Midlands have the lowest average Christmas gifts, at £264. Out of the 12 regions, the East of England came 10th, spending an average of £292.
Ah, but what about teenagers? When young people are subjected to peer pressure at school it can be hard for parents to resist. If “all the other kids are getting a Nintendo Switch” (some sort of games console, apparently) then you don’t want your child to be left out. This is where an adult conversation about available funds might help... possibly.
It is so easy to overspend after a hard year, especially bearing in mind endless Brexit, the pound falling against major currencies, the price of fuel, dire warnings of global warning, no chance of claiming a second nationality, etc.
Sarah Coles, of Hargreaves Lansdown, offers these sensible spending tips:
1 Start with a budget. While 57% of people bust the budget, it still means that 43% of people tackle their Christmas spending in a sensible and organised way.
2 Give yourself some leeway. Build in a contingency, so that if you spend more than planned on your Christmas celebrations, you do not immediately have a debt issue.
3 If you bust the budget, do not get carried away. It is easy to think you have already done the damage so you may as well get a credit card. But the bigger the overspend, the bigger the debt hangover, so even after you have bust the budget, don’t lose your focus on keeping your costs down.
4 If you end up overspending, it does not have to cost an arm and a leg. If you plan in advance and have a good enough credit rating, you can get an affordable credit card, or one with a 0% interest deal, and use them to spread the cost over a few months at a minimum cost.
And here are a few from me. I’m no expert but I have 63 years of Christmas experience:
1 Do not cave into the small children’s demands for Christmas stuff they see in TV ads. I refer you to the great A La Carte Kitchen heartache of c.1987 when my daughter wanted one of these items but it was completely sold out across the UK. One parent drove to the factory and bought the prototype. I think my daughter has just about forgiven Father Christmas for failing her.
2 Try to hold on to the Christmas Spirit - free to all users for nearly two millennia
3 Talk to friends and relatives and maybe come to a “no gifts” arrangement for adults, and a spending limit for the under-18s4Take note, crystal sparkles like diamonds
5 Everyone loves Christmas socks
6Having a handle on technology is great but having Handel’s Messiah on the in-car CD player is better.
• Free help with debt advice is available from many providers who can be found online.
• The Citizen’s Advice helpline is 0345 404 0506