It might be a little late to make any major changes to how you finance this Christmas, but if things have been a little tight this year, it might be worth making it a New Year’s resolution to be better prepared next December.
Luckily Maike Currie, associate investment director at Fidelity Personal Investing, has a top five tips that should make it easier to dodge the debt in December 2015, and make next Christmas a more comfortable holiday season.
First the obvious – try to save towards Christmas all year round. We all know it’s coming, and we all know it costs a bomb, so put some money aside each month, and you have 12 opportunities to add to the Christmas kitty over the course of the year.
Next, give your children a firm financial footing by opening a junior ISA for them. The tax-free deposits will be locked away until your child turns 18, and should accrue a chunk of compound interest, making this a particularly lucrative Christmas gift if you want your kids to be more financially secure than you have been in your adult life.
Third, if you are a taxpayer, consider making charitable contributions, as these may be tax-deductible and help you to get into the spirit of the season by helping a worthy cause.
Fourth, be tax efficient by saving into an ISA where possible, using your personal tax-free income allowance sensibly, and putting money into a pension if you can too.
And last of all, don’t do any of the above at the expense of running up even more debt; while many of the measures mentioned are ways to be more financially comfortable in the long run, personal debts will typically start to pinch much sooner.
Budget based on what you have available, avoid credit cards (unless you pay off the bill in full before any interest is charged) and generally do your very best to have a debt-free Christmas in 2015.