ClearDebt’s Marketing Manager, Jacqueline Cohen, full time working mum, gives us her guide to managing your budget over the Christmas holidays.

For many of us, 24 December is not only Christmas Eve, but also the day we finish work for a week – a whole week! But when it’s freezing outside and we have the temptation of the sales, kids to entertain and mouths to feed – how far do we justify stretching our spending budget in the season of cheer?

How much money is spent over Christmas

This Christmas will see 5.5 million Britons (11% of the population) going into debt – primarily to buy gifts they can’t afford. In fact, according to insurer Bright Grey, they claim the average adult will have spent 45% of their take home pay on items for Christmas in October, November and December of this year – come on now, am I the only person who thinks that’s a little ridiculous?

Bright Grey also say their research indicates much of the spending is done because they believe most gifts to be of high value – long gone are the days where a nice pair of socks or gloves would qualify as a good present and instead, people are paying into the hundreds for new phones and game consoles which still only count for one of many of the presents they buy for their loved ones.

On top of this, you then have to fill the holidays with entertainment for the family – going to the cinema to see the latest Christmas blockbuster is likely to set a family of four back around £60 if you include the car parking, drinks and sweets; and a day out could easily cost well over £100. So what to do?

Budget ideas for holiday season entertainment

For those on a budget – why not start the New Year as you mean to go on? The right frame of mind, the right finances and the right sense of money management. Days out spending your hard earned money can easily be replaced by seeing friends and family in each others’ homes, and for those with kids, why not replace play centres with home activities such as painting or, as my daughter often reminds me, playdough time! Even baking can be great fun, and at least you all have something to enjoy afterwards with a much needed cup of tea!

Save money on your gift giving

And as far gifts go, if you haven’t already bought for the entire neighbourhood – why not look at some home made gifts? Even writing a card with a genuine thought or kind wish for the person you’re sending it to can sometimes be more valuable to the receiver than a present they don’t really need. It’s amazing how few people manage to write in their cards anything more than the standard “Merry Christmas and Happy New Year” message. I sometimes wonder if those I buy and send cards to, appreciate the words I write more than the gifts, because the words are heart felt – and at what better time of year to give someone thanks for the friendship they give to you, than at Christmas. Yet another thing, that costs you only time and effort rather than money.

Don’t be tempted by the January sales

Finally – the ever attractive January Sales – don’t do it!!! No matter how cheap something is, if you don’t need it, it’s still more than you need to spend. The sales are a great activity to do if you genuinely need things for the year ahead. But if this is the case, go shopping with a plan – a list of exactly what you need to buy and a budget for how much you can genuinely afford to spend – and no matter what happens or what you see, don’t divert from the list!

Good luck! Wishing you all well over the holiday season,

Jax

There was a time, believe it or not, when we didn’t have mobile phones. Even stranger, a time without Facebook. And, although you might not remember it, a time when going on holiday meant the only contact you had with the outside world was a quick call from a telephone box which gobbled up all your foreign currency.

Oh how times have changed.

It now seems our addiction to keeping track of the gossip back home is costing hundreds if not thousands of pounds to UK holidaymakers who have their mobile phones attached to their…well…everything. An unexpected debt like this is the last thing anybody wants when they return home from their holidays!

According to Uswitch, 1.3 million holidaymakers are currently at risk of being charged just for turning their mobiles on when being abroad – never mind the charges they’ll get when they start using it! The research also confirmed a whopping 22 million people take their mobiles on holiday with them and of that number, nearly 70% won’t even bother to check the costs they might incur when using their phones on their travels….they’ll just wait until the bill arrives when they get home…..genius ;)

Despite new regulations for mobile phone use in European holiday destinations, which have capped the maximum charge at 32p per minute and enforced a £41.50 cap for data roaming costs, any additional expenses like this can badly affect anyone living on a strict budget.

Our view? Well – it’s all very nice seeing the updates our friends post from their iphones and blackberry’s on Facebook – but at what cost? And is it really vital to be calling and texting home at such high costs when in the good old days, a post card and a phone box used to do just fine?

Take out poll and let us know if this year you’ll be taking your phone on holiday with you? Or, are you going cold turkey in the sun?

Why not read our blog post about people who get into debt for the sake of their holidays abroad.

The summer of 2008 was what I would call, the summer of denial.  No one could see the oncome of the “crunch” and even if they did, they closed their eyes to it, hoping it would go away.  But of course, it didn’t.  And when it came, drastic cuts to our lifestyles were essential in order to weather the storm ahead.

A year on and people have now become accustomed to their adjusted spending habits – taking on a more sensible approach to bills coming in, and money going out.

This theory is well illustrated by research from Tesco Savings whose latest research shows if given £1,000 prize money, most adults would use this to pay off their debts.

Despite the grounding many adults may have, their children, it seems, are still working to their wish list and struggling to understand these new priorities as they suggested such a win be used to pay for a much needed holiday.

This may prove a hearty chuckle at childish innocence but it also raises more serious concerns regarding the necessary steps needed to teach our kids how to budget for a better life – to ensure they learn the lessons of today to safeguard their tomorrow?

As Christmas draws closer, I wonder how many parents will give in to their children’s plea for the latest gadget, or game stations worth £100’s of pounds.  Will any parents be suggesting they make their own presents this year?  How many will continue to buy on credit telling themselves they’ll pay it back later?  How many know they won’t but take the risk anyway?  And how many can’t?

There is never a better time to address these issues than the present – pun completely intended ;) – Christmas can be the perfect setting to teach our children how we can be more traditional in our choice of present and style of celebration whilst still having a better time than ever before.

People with debt problems are more prepared to cut their children’s activities than to give up smoking, reveals a survey from ClearDebt, the Manchester based debt advisory and IVA arranging company, which also shows that four out of ten debtors don’t talk to anyone else about their money problems.
The survey 0f 309 individuals, published today, 21 November, shows that 48% of smokers regard their habit as sacrosanct and only 18% are prepared to give up, whilst 72% of parents are prepared to cut back on their children’s activities to save money.

ClearDebt’s survey showed that 40% of people with debt problems would tell no-one their worries. Only 4% would tell their parents and six out of ten would not confess their debts to their partner.

The top five items people would not cut back on were:

Second Holiday 53%
Smoking 48%
2nd car 47%
Ready meals 45%
Satellite TV 45%

The top five items people would reduce spending on were:

2nd car 16%
Reduce smoking 13%
Satellite TV 8%
Child’s activities 8%
Holiday abroad 8%

Commenting, ClearDebt marketing director, Andrew Smith, said:

“It seems sad that a person with a twenty-a-day habit, who could save around £2,000 a year by stopping smoking, would rather cut back on their children’s ballet lessons or football club.

“But, the real story here is that people in debt really don’t want to cut back on any of their luxuries if they can help it – or maybe just that things considered luxuries a few years ago are now considered essentials”.

-ends-

For further information please contact:

ClearDebt:
Andrew Smith 01234 825826 (mob: 07971 272 483) email: Andrew.smith@cleardebt.co.uk

College Hill Associates:
Paddy Blewer – 020 7457 2020 (mob: 07765250857) e-mail: Paddy.blewer@collegehill.com

Note for Editors:

ClearDebt is the newest entrant to the Individual Voluntary Arrangement (IVA) market.

ClearDebt aims to provide the most transparent and ethical service to debtors, at the lowest cost – giving many more people the opportunity to arrange an IVA than has been possible before. All customer-facing staff have been specifically trained in IVA provisions and all have insolvency practice experience: we are not a call centre, nor do we employ call centre type operatives.

ClearDebt’s principles include providing best debt advice wherever possible to all debtors: Where the facts indicate an IVA is the right solution we will provide advice and support – but never pressure – to the debtor. Where the facts indicate other solutions we’ll point the debtor in the right direction.