Finance for Women
How to have a financially stress free Christmas
Christmas is typically a time when expenditure rises and usually far more than we intend itt to. This year some people may be feeling the pinch due to loss of jobs or reduction in earnings, or even just rising costs in food and other housekeeping expenses.
Along with the addition of a child and especially another one to a growing family, this can put a heavy burden on parents, already struggling to make ends meet.
Here are 10 top tips for keeping costs down during the festive season:
1.Set a budget and stick to it
Regardless of how you fund Christmas, it's important that you understand how much you can afford to spend during the festive season. It is too easy to get carried away with Christmas spending, so by working out exactly what you need to buy and sticking to a strict budget, you can avoid ending up in the red or with debt you cannot afford to repay, come January.
The Financial Services Authority (FSA), the regulator has very useful tools on its website under the heading of “Money Made Clear”, to help you budget, and start a discipline that could transform your finances. Log on to www.fsa.gov.uk
2.Take control of your credit cards
It is all too easy to get carried away or spend more than you would normally, with the pressure of all the other Christmas jobs to complete and the need to get those gifts for family and friends, just by random use of your credit cards..
Be particularly aware of the allure of store cards; where the idea of an immediate discount on Christmas gifts or money back may seem like a good idea, the interest rate on purchases is likely to be highly uncompetitive; even the best are inferior to regular credit cards. Unlike normal credit cards, store cards are handed out by potentially untrained checkout staff with no understanding of customers' financial circumstances.
If you wish to take advantage of discounts and promotions calculate that you will be able to pay off the whole amount when the bill arrives after Christmas. Otherwise the savings you make will be cancelled out by the high interest rates added to your bill, by delaying payment.
Decide before you leave the house, which cards you are going to use: check out the next payment date to give you a longer time before payment is requested. My husband always carries a slip of paper, which charts the settlement dates of all his cards and his choice of payment usually depends on that.
Supermarket credit cards can offer the best value, often have competitive rates and are linked to loyalty schemes. For example if you use a Sainsbury's credit card, you will receive zero per cent on purchases for 10 months but also double nectar point for two years.
3.Balance your funds with a zero per cent purchase card
For those with insufficient savings, trying to fund the whole of Christmas spending through their December salary can be a bit of a stretch. If you do need to borrow over the festive period, a credit card offering zero per cent interest on purchases might be the cheapest option. You do need to, make sure you borrow within your means and can pay the debt off within the introductory period - otherwise you will be paying for this year's Christmas presents, when the lights are switched on again next year.
4.Spend and save at the same time
Cashback credit cards give you money back every time you spend on them, no matter where you buy. Get a cash back card at the start of the year, and use all the cash back from spending throughout the year to put towards next Christmas. The current best buy is the American Express Platinum Cashback credit card, where for every pound spent, you can gain an extra five per cent cashback. Obviously you need to make sure you can afford to repay your spending.
5.Shop around for loans
If applying for a loan before Christmas, do shop around. Despite advertised rates barely moving, lenders often tighten criteria on personal loans in the run up to Christmas. Shopping around for the best deals can ensure that you only apply for products you are likely to be accepted for and that it will suit your needs. With lending criteria becoming more and more stringent, it's important to keep your credit record as clean as possible and not tarnish it with failed applications for loans.
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Marlene J. Shalton M.SC(Econ), FIFP
Certified Financial Planner,
Chartered Financial Planner
Consumers urged to shop safely online this Christmas
To mark the first anniversary of the card industry’s Be Card Smart Online initiative, The UK Cards Association is again running its online safety campaign – helping to remind consumers of the steps they can take to minimise their chances of being a victim of card fraud online.
More than 32 million of us now shop online, so it is more important than ever that everyone plays their part in the fight against fraud. Encouragingly, cardholders seem to be heeding the messages from last year’s campaign.
To help stay safe whilst online, consumers are urged to follow the simple advice below:
1 Keep your PC protected by ensuring you have the latest operating system, browser and up-to-date anti-virus software.
2 Look for the padlock symbol - especially if you’re buying from a website for the first time. It’s a good indication that they are reputable.
3 Register your cards with Verified by Visa or MasterCard SecureCode when prompted. It is quick and easy and makes shopping online even safer.
4 Always log out after shopping online and save the confirmation e-mail as a record of your order.
You can learn more about how to stay safe online by visiting www.becardsmart.org.uk.