12.6m households having either no savings or less than £1,500 in savings. *, Christmas and how to fund it can be a nightmare prospect for a lot of people.

Whilst we would all hope that after Christmas last year we would have had the sense to have started saving a little bit each week towards the festivities this year, in the real world that often doesn’t happen. Unexpected expenses, reduced income or just no time to plan means we often face Christmas with little or no savings.

Hard hitting as it may be, the average credit card debt per household in the UK in August 2019 was £2,608. Average consumer debt per household reached £7,874, with the average total debt per household (which includes mortgage debt) hitting £59,441 **

Research has shown that worrying about money is one of the leading causes of stress amongst the Police family. It doesn’t just affect your personal life, it can also affect your work, family life, health and relationships. That’s why we are here to help you avoid a Christmas nightmare.

Spending vs borrowing

So whilst it may seem tempting to fund Christmas on your credit card, it would be worth taking a minute, before the mulled wine and mince pies start, to think about the long term effect of credit card debt.

If you decided to make only the minimum required repayment on your credit card each month it would take around 26 years and 7 months to pay off the average credit card debt per household of £2,608. This timeframe reduces to 5 years and three months if the cardholder pays the initial minimum as a constant amount each month, rather than paying a decreasing monthly minimum. ***

Rather than reviewing your budget after Christmas, why not do it now? That way, you will have a good idea of exactly how much you have, or don’t have, to spend this Christmas.

And don’t forget it is not just Christmas. Often the real struggle starts after Christmas when January pay day seems a long way off and living on credit or going into debt might seem a tempting way to get through. So let’s take the financial bull ‘by the horns’ and get to grips with your finances before the festive period starts.

So, faced with that reality, how can you survive and enjoy Christmas without it becoming a nightmare start to 2020?

Be savvy with gift giving.

We all remember the time when we were children and the excitement of receiving your perfect gift for Christmas. But as adults, Christmas gifts are just a way of telling the people close to us that we love them and are thinking of them. By this token, they DO NOT need to be expensive. Statistics published by the Bank of England estimates that a typical household spends £2,000 per month and this goes up by £500 in December. ****

We can already hear you asking really only £500? We suspect for some families that figure is much, much higher.

So a reality check, do those people that you love really need an expensive gift to make them know you love them? Would they be happy knowing you may have gone into debt to get them a Christmas present? The answer to both questions is a resounding NO!

Think about other ways of making gifts, something as thoughtful as a picture book or collection of photos, the promise that you will do something lovely (and not expensive) with them after Christmas and a cute home-made gift, often means far more than the latest gadget that might be sitting in a drawer in a few months’ time. Get the kids involved too, so hand painted stones as paperweights or pictures in frames for someone’s desk or mantelpiece can have much more sentimental value than something from a shop.

If in doubt, talk to your loved ones about being on a budget and that you are thinking more creatively about their gift this year. For most people this relieves the burden of having to reciprocate your expensive gift and can be a relief if they are struggling with their Christmas finances too.

Food, glorious food!

It’s safe to say we all look forward to the prospect of special food at Christmas. However, there is a limit! Often in blind taste tests, some less expensive foods perform as well if not better than their more expensive counterparts.

Think about how you could save money on food and drink this Christmas:

• Buy less – an obvious one, but if you are throwing food away or having copious amounts of leftovers then re- think how much you actually need.
• Don’t buy things ‘just in case’ people might drop in, you may end up eating or drinking any purchases yourself or simply throwing them away!
• Entertain at home but ask people if they can bring some food. Same goes for alcohol, ask people to bring what they like to drink.
• Make don’t buy, think about preparing your veg and food instead of buying the more expensive convenience options.
• Use up your vouchers, points and any other discounts you have. If you have room and can store non-perishable items then buy them when you see them on offer.

Panic buying

There is nothing like Christmas for making us panic buy and spend over the odds for gifts, decorations, party clothes and food.

• Deck the Halls! – much as we love to have a new colour or ‘theme’ for our Christmas decorations each year, most people would be surprised by the amount of money they spend on changing decorations each year. Think about what you have already as a base, and either add cheaper decorations in new colours from discount stores to freshen up what you have, or buy decorations you love in the sales after Christmas and just keep and re-use them every year.
• Fresh trees vs artificial trees – whilst we all love the smell of a real tree, think about buying an artificial tree during the sales or with points or discounts and re use. You can always buy room fragrance, candles or reed diffusers in Christmas scents to make your room smell great and you will have a tree that you can use for several years to come.
• Party Clothes – Christmas day and party clothes do tend to have a very limited time to wear. Whether it is for you or your family, think about what you already have and re use. Better for the environment and for your finances and you will still look great!
• Gifts – if there is something that a little person or loved one has to have, shop around, use any discounts and voucher codes to see if you can get the best deal possible. Don’t forget postage costs can really add up if you are buying last minute so organise to collect from store for free if possible.
• Pre-loved/owned - Don’t forget pre-loved items too, often you can find some great items on sale prior to Christmas on re sale sites and have a think if there is anything you could sell before Christmas to raise some much needed extra cash.
• To wrap up – beautiful wrapping paper and accessories can look amazing but a lot of it just ends up in the re-cycling. Look for discounted quality paper or buy from discount stores. Think of a lovely message on the tag instead to make it personal.
• Plastic and more plastic. Now this might be a tough one, as a lot of children’s presents are made from non-recyclable materials but, do see if you can sell or donate older toys rather than adding to land fill. Often they are barely used and with a good antibacterial clean, will be another child’s much loved toy. Don’t forget to recycle the packaging and wrapping as much as possible.

Whilst some of the tips may be obvious, if you approach Christmas in the right way, remember your priorities and have a sensible approach to spending, you can earn yourself a Happy New Year.

If you, or someone you know in the Police family, needs help with debt, we’ve teamed up with PayPlan, one of the UK’s leading free debt advice providers, who offer free and confidential advice to anyone in serious financial difficulties.

Call PayPlan

0800 197 8433

www.payplan.com/police-mutual