Finance Choices
Brits saving and not borrowing for Christmas
UK residents would rather raid their savings than borrow money to fund the festive season, new research reveals.
Nine out of ten Britons claim they will cover the cost of Christmas from money squirreled away during the rest of the year - rather than add to their debts figures from MyCallcredit show.
Consumer affairs director at the credit report firm, Mel Mitchley, described these findings as "really encouraging".
"There?s a lot of emphasis on lenders to lend responsibly but there is also an onus on the individual to borrow responsibly. Our survey shows that message is getting through and it?s going to be individuals who are piling on the pounds this Christmas, not their debts," he added.
The firm found that more women (10.4 per cent) than men (8.8 per cent) plan to borrow money to pay for the Yuletide spending splurge.
But one in four of these men adds that more than half their costs will go on credit cards, compared with just one in eight women.
However, 67 per cent of these Christmas credit users say they will have paid off their festive debt within three months.
And the holiday season can be costly, with figures from MyCallcredit indicating that 34.8 per cent of Brits think Christmas will cost £500 or more.
Over 65s think they will spend the least, with two in five saying Christmas will cost them under £250 - almost double the national average.
However, the 35.6 per cent of people paying for the holiday season from their savings might be missing a trick.
This is because by paying for Christmas items on a credit card with zero per cent on introductory offer on purchases such as HSBC's Christmas credit card, and then paying this off with in the introductory period (usually six to 12 months), means you can spread the cost of the festive season for free - while leaving your savings to build up interest.
Nine out of ten Britons claim they will cover the cost of Christmas from money squirreled away during the rest of the year - rather than add to their debts figures from MyCallcredit show.
Consumer affairs director at the credit report firm, Mel Mitchley, described these findings as "really encouraging".
"There?s a lot of emphasis on lenders to lend responsibly but there is also an onus on the individual to borrow responsibly. Our survey shows that message is getting through and it?s going to be individuals who are piling on the pounds this Christmas, not their debts," he added.
The firm found that more women (10.4 per cent) than men (8.8 per cent) plan to borrow money to pay for the Yuletide spending splurge.
But one in four of these men adds that more than half their costs will go on credit cards, compared with just one in eight women.
However, 67 per cent of these Christmas credit users say they will have paid off their festive debt within three months.
And the holiday season can be costly, with figures from MyCallcredit indicating that 34.8 per cent of Brits think Christmas will cost £500 or more.
Over 65s think they will spend the least, with two in five saying Christmas will cost them under £250 - almost double the national average.
However, the 35.6 per cent of people paying for the holiday season from their savings might be missing a trick.
This is because by paying for Christmas items on a credit card with zero per cent on introductory offer on purchases such as HSBC's Christmas credit card, and then paying this off with in the introductory period (usually six to 12 months), means you can spread the cost of the festive season for free - while leaving your savings to build up interest.
posted by Bruce Wayne at 7:55 AM
Brits saving and not borrowing for Christmas
7 Comments:
The Christmas season is truly the season of giving. There is no other time of the year when people?s hearts are as open or their hands are as freely generous as they are during the Christmas holiday. I mean, even our favorite Christmas motto states, ?It is better to give than to receive.?
While giving does fill your heart with joy and help those who are less fortunate than us, many have taken this motto to extremes when it comes to buying Christmas presents for their children, spouses and other family members.
It is not uncommon for families to run up tremendous high-interest credit card debt to buy their children elaborate and expensive gifts such as computers, stereos and designer clothes as Christmas gifts.
Just take a look at the commercials that air constantly during the Christmas season. They all have one goal in mind: to motivate you to spend as much money as you can during the holidays.
I can remember one commercial in particular that advertised a leading high-end car manufacturer. The husband opened up his gift from his lovely wife to reveal a set of keys. When he went outside to look in the drive, there was a very expensive, sleek and seductive sports car. Seriously, who has been good enough all year to deserve a $50,000 luxury sports car? But the message is clear, give the very best. The same angle is used on men when it comes to buying expensive jewelry for their wives. It?s never ending.
Now, I?m not saying that advertisers are to blame for our ballooning Christmas debt. They are simply armed with the knowledge that more consumer spending takes place during the holidays, and they want a piece of the pie.
The fault then lies with our own inability to curb our holiday spending. It seems that even if we do not have the money to finance a lavish Christmas, we will still purchase one using our high-interest credit cards and worry about paying it off later. And worry we do.
If this scenario sounds familiar, it doesn?t have to be that way yet again this Christmas. You can take a few simple steps to alleviate Christmas debt altogether.
Here?s how:
· Spread your holiday spending throughout the year. If you?re one of those people who love to lavish your family members with expensive gifts during the Christmas season and you don?t want to stop the practice, you can avoid a debt hangover by spreading your purchases throughout the year instead of all at once a few weeks before Christmas.
· Set a holiday budget. Decide what you can reasonably afford to spend during the holidays and do not go above that amount even if it means sacrificing gifts along the way.
· Buy only for those closest to you. Contrary to what you might believe, you do not need to buy gifts for all 27 of your nieces and nephews. Buy for those in your household first, and then, if you have any left over, buy for those closest to you. You should also avoid buying for everyone at work. Just because someone buys for you that does not mean that you need to return the favor. Simply send a Thank You card and remember to put them on your Christmas card list.
· Remember that the best gifts come from the heart and not the department store. Likely many in your family would enjoy spending more time with you during the holiday season instead of watching you run from store to store trying to find the perfect gifts. Why not opt to spend more time together this year and keep gift giving to a minimum?
· Homemade gifts mean more and are less expensive. Wouldn?t it warm your heart to know that your beloved Aunt or Grandma baked your favorite Christmas treat especially for you? You wouldn?t have to know that yours was just a sampling of a large batch that she also distributed to her beautician, neighbors and friends. It didn?t cost her much money, and it won?t cost you much either to do the same for your friends.
So, before you get caught up in the frenzy of Christmas consumer spending, take a moment to reflect on what is most important to you and your family during the holiday season.
I normally have $600 saved for Christmas. This year I'll probably spend it all.
Normally my kids get three things. Something they want, something I want to get them and something for everybody (our CD player is broken).
Most of it goes towards my kids. I buy breakfast for my staff at work. I usually buy something small for my parents. How does everyone else divvy it up?
I am thinking of Saving $200 for Christmas (we have a small family). For My Co-Workers I would like to make them Small Gift Baskets (with items I already sell).
Total: around $400.
* $150 on my sister and her family, because gifts are really important to them.
* $100-150 total on my parents, step parents, my other sister, my grandmother, and my best friend.
* About $20 on teacher gifts.
* Plan to spend about $100 on my son's birthday and Xmas combined (he's a December baby). He's only two, so he doesn't have big requests yet. It's just a matter of restraining myself.
Ways I save money:
* My brother and I have a permanent no-gift pact, which includes our kids and spouses. I have proposed a no-gift pact to my mother this year, as well, because we're both trying to save money.
* I don't buy gifts for work friends or neighbors.
* My spouse is Jewish (non-practicing), so we don't do Xmas gifts for each other or for his family.
I don't want to know the grand total, thankfully I buy thruought the year so I do not have to look at one fast lump out of my pocket. (big extended family)
We do aim to keep each gift down, and the kids get only 2 or 3 things plus a stocking. but add up the parents and the step parents, and the grandparents and the cousins, and the work and the ....
Nevermind I would be so depressed if I had all of it to do now.
The past few years it has been $1000+. Altogether, DH and I have four parents, two grandparents, two children, nine siblings, four nieces and nephews, and two friends that we buy for (and each other!). This year I told everyone that I was not going to make myself crazy and broke spending $30-40 on everyone (plus a lot more of DH and the kids), so I asked if we could do something different.
DH's family decided to do a "fun" gift of no more than $10. It can be used, a joke, or whatever, as long as you stay within the budget. So I cut out about $150-200 there. For my family, we are still buying for my parents (and kids, obviously!), but the siblings and spouses drew names and agreed to a $50 budget. So I cut out 4 people there, for another $100+ in savings. And hopefully a lot less stress too.
I plan to spend $600 or less this year, but DH plans to spend $1000. I think we are going to compromise at $800. He totally wants to spoil the kids, but I know they will already be spoiled rotten by their aunts and uncles, not to mention grandparents. I think they have too much already, but our families really protested when I said they have too much. I guess if it makes them happy to buy for the kids, they can do it...we're just going to have to clean house (freecycle!) before Christmas to make room!
According to a new survey released by Myvesta, Americans plan to spend slightly more this holiday season on friends and family than in 2004. Myvesta's annual Holiday Shopping Survey found that the average American plans to purchase $747 in holiday gifts this year compared to $716 spent in 2004. This is an increase of up 4.3% from 2004. Of the total number of people surveyed, nearly half (49.5%) plan to spend less than $500 this holiday season.
"While the average amount people are planning to spend has risen slightly, this may not turn into a banner year for retailers," said Steve Rhode, president of Myvesta. "Individuals and families are not much better off than they were last year and most do not have the extra cash available to drastically increase their holiday spending."
Some other results from the survey:
* Southerners will spend $847 this year - the most on holiday purchases of any region
* Westerners will spend $660 this year - the least on holiday purchases of any region
* People in the Northeast plan to spend $720 and those in the Midwest plan to spend $699.
* 12.7% of the people surveyed plan to spend more than $1,000 this year.
* People between the ages of 35 and 44 will spend an average of $829 this year - the most of any age group.
* Both males and females plan to spend an average of $747 this year.
* Married couples will spend on average $848 this year - nearly 56% more than those who are single who will spend an average of $545.
The survey contacted 1,000 random people by telephone from November 4 to November 6.
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