Take action now to avoid a festive fallout with your finances

The pre-Christmas sales are in full swing and retailers are bombarding us with their so-called '˜too good to miss' offers.

Set an affordable budget for Yuletide expenses and stick to it. Photograph: PA

But it can be a dangerous time for people being tipped into debts by festive spending – which they could spend much of 2019 trying to pay off when bills thud onto doormats.

Research from the Money Advice Trust charity suggests 37 per cent of people put last Christmas on credit, and 13 per cent of people say they regularly worry about money in the run-up to Christmas.

Debt help bodies often see a surge in cries for help around the start of a new year. Debt charity StepChange’s figures show that January 2018 was a particularly busy month for people calling and seeking debt help on its website.

But there are steps you could take now, to help lessen the chances of a post-Christmas debt hangover in January. Here are some tips from StepChange

Set a budget and stick to it

It can be difficult to resist falling into the “generosity trap”, spending money we can’t afford because we want to treat loved ones to presents, food and the whole works. But by setting an affordable budget and sticking to it, there’s more chance of being able to afford the little treats that can satisfy our generosity urges for loved ones throughout the year ahead as well, rather than finding the new year has to be all about belt-tightening to pay for the aftermath of Christmas.

Don’t forget to include hidden costs

Budgeting for things like the cost of travel to get to wherever you’re going at Christmas, the cost of joining in the work party, contributions to activities that children might be involved in at school, or the Secret Santa, are easily overlooked. Before you know it, they’ve blown your budget. So try to make a plan of everything you need to factor in – not just the cost of food and presents. If something has to give, then at least you have a chance to think about which area of spending you’re most prepared to cut back on.

Beware of the pressure to ‘just put it on plastic’

Making good memories doesn’t have to be about spending lots of money. Your children’s home-made Christmas biscuits may be just as welcome (and more fun). For the items you do buy, think about the consequences of “putting it on plastic”. It’s still real money in the end. Your friends and family wouldn’t want you to get into difficulty for the sake of buying them stuff.

Plan ahead

Although there’s not long to go until Christmas, you can still plan the load a bit. That can help you spread (or even reduce) costs. If you have a freezer, making food you might otherwise buy can prove cheaper than buying ready-made versions. Looking further ahead, if you start a savings plan from January to save up all year for the following Christmas may mean a borrowing-free Christmas a year from now.

If you overspend don’t panic – but don’t ignore it

Go back to basics and draw up a budget that will get you back on track. If that isn’t enough to solve the problem, then one of the reputable free debt advice charities will help you. The sooner you tackle any debt issue, the better. For further free advice and support, visit stepchange.org.