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The Festive Financial Crunch

17 December 2014  |  2968 views  |  0

Christmas is almost upon us – a time for festive frivolity, laughter and fun. Or is it?

New research from the Debt Advisory Centre (DAC), shows that 19% of people cannot afford the cost of Christmas and as such won’t be celebrating.

A third of people also admitted that they even end up dreading Christmas. This feeling is most prevalent among 25 to 34-year olds. Almost half of this age group admitted to having financial concerns while one in three said that they would avoid Christmas celebrations to focus on other aspects of their life.

In comparison, only around one in eight of those aged 55 or over said they were in a similar position, with this age group thoroughly embracing Christmas.

The true cost of Christmas

Around £2.4 billion was wasted on food, drink and presents that were unused, unneeded or unwanted in 2013 – equating to around an average waste of £28 per person.

How do Brits cover this annual cost? Only half of those that the DAC surveyed said they would cover all of their expenditure through earnings. 36% said they would use some of their savings to fund spending while others look to borrow using credit or loan facilities.

Shockingly, one in ten people admitted they are still paying off loans or credit cards from last Christmas!

Furthermore, 1.4 million people are set to turn to payday loans to cover their festive spending with the average adult set to spend £530 on Christmas this year. On a national level that equates to around £26 billion – a £2 billion increase on 2013 – showing just how much Britain is prepared to splash out around Christmas.

How can we reduce the festive financial burden?

There are many different ways we can make Christmas a financial stress free zone. Self-restraint is the starting point – but most of us need help with this. Accounts that come with jam jar or envelope facilities make it easier for people to save all year round and proactively manage the Christmas spending spree. Rather than reactively have to cover it with emergency measures. Many prepaid accounts have this facility. Prepaid cards also prevent people from overspending – you can’t go overdrawn and get hit with any expensive banking fees.

Finally – seek out accounts or prepaid cards with cashback attached. Imagine in January receiving a percentage of your Christmas expenditure back into your account? This sum could tide you through ‘Blue Monday’, or you could pop it into your envelope and start saving for the next one!  

 

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