WITH ONLY 10 weeks to go and only two pay-days until December 25, hard-pressed households are getting increasingly worried about the impact the festive period will have on their family finances.
“Interest rates have been at historic lows for more than five-and-a-half years now,” says Jeremy Duncombe from the Legal & General Mortgage Club. “This situation will not last forever, and speculation over when rates will rise is mounting.”
While any increase is likely to be gradual, a rise will mean higher debt repayments for borrowers. For many households, this could make a manageable situation unmanageable.
In fact, more than a quarter of people with a mortgage say they will be in financial trouble when interest rates rise, according to new research from the Building Societies Association and the Money Advice Trust. But while this makes for gloomy reading with Christmas looming, there are steps you can take to ensure you don’t start 2015 laden with debt.
“Festive spending can quickly spiral out of control, and can have a knock-on effect on your personal finances year on year,” says Jane Symonds from the Money Advice Service. “But if you start to make a few simple changes during the weeks leading up to the big day, you can avoid waking up with a financial hangover in the New Year.”
Here’s our guide to making savings on your day-to-day spending, along with some simple ways to boost your Christmas fund at no extra cost to you.
FIX YOUR BUDGET
As a starting point, it is worth sitting down and setting out what you expect to spend on Christmas.
“Keep a detailed list of expenses such as presents, decorations, food, socialising and transport,” says Symonds. “This should help you to avoid blowing the budget.”
For help staying on track, make use of tools such as moneyadviceservice.org.uk/en/tools/christmas-moneyplanner.
CUT BACK ON SPENDING
Once you have drawn up your Christmas budget, take a look at where you can make savings on your everyday spending between now and December 25.
You might be surprised at how easy it is to free up some spare cash by cutting back just a little. For example, limiting takeaways and swapping your morning cappuccino for an instant coffee throughout December can make a real difference.
“Make your own packed lunch rather than shelling out for an expensive shop-bought sandwich,” says Andrew Hagger, finance expert from MoneyComms. “Even if you only do this a couple of days a week, you can easily save £7 to £8. “And don’t impulse-buy at the corner shop. Plan your food shopping, and go to the supermarket just once a week,” adds Hagger. “Also remember to make use of food in the freezer.”
Look at your bank statement and cancel non-essential direct debits that you are not using, such as gym memberships, dental plans and magazine subscriptions. The sums may not be large, but every little helps.
SWITCH CURRENT ACCOUNT
If you are searching for ways to boost your income, now could be a good time to take advantage of the faster, seven-day switching rules and move your current account, as there are some great incentives up for grabs.
For example, M&S is currently offering a £125 gift card to spend in store if you apply to switch through MoneySupermarket.com.
Elsewhere, Halifax is offering £100 cashback if you switch to its Reward current account, and First Direct is offering the same incentive to those who switch to its 1st account.
While there is no minimum funding requirement for the M&S account, note that Halifax requires you to pay in at least £750 a month into the account and First Direct, £1,000 a month.
Current accounts should not be chosen based on the switching incentive alone. You need to consider other factors, such as the rate paid on in-credit balances if you spend most of your time in the black, or the overdraft charges if you spend time in the red.
Make extra cash by selling belongings you no longer want or need that are sat gathering dust in the back of a drawer
“Coupons, vouchers and money-off apps are increasingly popular and can cut the cost of a wide range of goods and services, ranging from tins of beans, beauty treatments, driving lessons and car tyres, to meals out,” says Claire Peate from GoCompare.com. “This all helps to make squeezed budgets go further.”
Sites include Voucher Codes.co.uk, Savoo.co.uk, and VoucherCloud.com.
SELL OLD GADGETS
Make extra cash by selling belongings you no longer want or need that are sat gathering dust in the back of a drawer.
You can, for example, make money from your unwanted CDs, DVDs, games, technology and electronics, and even your clothes, by selling them on a site such as MusicMagpie.co.uk.
You can also sell your old mobiles, laptops, tablets and digital cameras at CashInYourGadgets.co.uk “You can soon rake cash in via a site such as eBay,” says Hagger. “Or you may want to set up a stall at a local car boot sale, as you can easily pocket between £50 and £100 for just a few hours of your time.”
EARN FOR YOUR OPINIONS
Another easy way to earn some extra cash over the next few weeks is by completing paid online surveys; you could even do this in your lunch hour.
Site recommendations from moneysaving website, MoneyMagpie.com, include ValuedOpinions.co.uk, SurveySavers.co.uk, and also YouGov.co.uk/account/register/… Read full article.