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Avoid Moneylenders and getting into Unnecessary Debt at Christmas

Posted on: 06 Nov 2023

With Black Friday quickly approaching and Christmas just 7 weeks away, it can be a difficult time financially for many people. Each year, consumers are spending more and more on Christmas – last year consumers in Northern Ireland spent on average £1,048.20 on Christmas1.

For some, resorting to a money lender is often seen as a way to meet their bills at this time of year while giving their loved ones a Christmas to remember.

Martin Fisher, from the Irish League of Credit Unions cautions against taking on such a loan as it often comes with exorbitant interest rates that make it difficult to clear the debt and leads to even greater financial struggles for households.

“We know people face additional financial burdens at this time of year and unfortunately, all too often credit unions see at first hand the devastating impact borrowing from a money lender can have on a household. That’s why we are appealing to anyone who needs some additional cash this Christmas to come talk to their local credit union. We’re a not-for-profit that is firmly committed to supporting people in need of help with living expenses”, he said.

“Credit unions are here to help members enjoy the holiday season without the woes of financial excess. There are no hidden transaction fees or charges. Loans can be as low as a few hundred pounds and are approved quickly. A repayment scheduled is agreed based on the person’s monthly income and their ability to repay the loan without adding additional stress on your finances.”

This is Talk Money Week, and it’s a good time to focus on our financial planning and household budgets. With Christmas just around the corner, Martin Fisher says there are some sensible things we can all be doing to avoid getting into unnecessary debt at this time of year. His tips for Christmas financial planning include;

  • It’s never too late to start saving

Yes, we should have started a regular saving account last January, but even putting away a little bit of cash each week between now and Christmas will add up. Have a

goal for what the money will be spent on – food & drink for the festive season or a family trip to the pantomime.

  • Make a Christmas shopping list.

It can be all too easy to “shop till you drop” without a carefully set out financial plan. Make a list of what you need to buy and who you need to buy for. Divide your lists into categories that might include gifts, food, clothes, and socialising. Prioritise your spending and add up the estimated costs.

  • Set a budget for your Christmas spending.

Once you have a list of everything you intend to buy, set a budget for a reasonable and affordable amount to spend. Think carefully about your food shop and cut out the excess. Do you really need to make a sherry trifle because it’s tradition when no one will eat it? Many of us overindulge in sweets and treats at Christmas time, resulting in a huge amount of food waste.

  • Agree a spending limit with Friends and Family.

Many people will be struggling this Christmas. When you’ve worked out how much you can afford to spend on presents, talk to people you intend to buy gifts for. Maybe you can agree between you a reasonable limit on the cost of the gift. A Kris Kringle can mean buying fewer gifts and puts the focus back onto thoughtful giving.

  • Loyalty cards

Loyalty and club cards are an excellent way of earning redeemable points and accessing deals or discounts. Sign up or check any pre-existing accounts to avail of the financial benefits on offer with different retailers.

  • Stream for free

There is nothing like cozying up by the fire to watch a movie at Christmas. Many streaming websites offer a variety of different movies and TV shows to watch. Avoid the extra cost of subscribing to each individual site - many offer free week/month long trials.

  • Save on postage.

Online retailers offer discounted rates on postage. You might be purchasing several items at different stages in the lead up to Christmas. Instead of paying a postage fee each time, it may be worthwhile availing of a delivery subscription like Amazon Prime. And, for Christmas cards, use a free online service to send cards by email!

Martin Fisher, Head of Northern Ireland Irish League of Credit Unions says “Our priority is to ensure our members enjoy a stress and debt free Christmas. It’s important to celebrate at this special time of year but do remember to set aside some money for January, to pay off the credit card and other bills. With a bit of forethought and planning, we can avoid the January financial blues”.