Covering the Cost of Christmas
06th January 2022
It may be the “most wonderful time of the year”, but every time it rolls around Christmas is costing us even more. As a nation, we’re racking up about £439 per person in debts over the festive season - and we’re dragging those debts along with us deep into the New Year. In fact, it takes the average Brit 4 whole months to clear our Christmas debt, and each year we’re being pressured to dig deeper and spend more.
Remember, the word “debt” covers a lot more than just mortgages and (shudder) payday loans. Credit cards, for instance, are such an everyday thing for most of us that we often think about the repayments as just another monthly bill. “Invisible” debts like these can easily mount up around us – and at the interest rates they charge they’re actually some of the heaviest financial loads we’re carrying.
So, for those of us already in the money-hole, it’s time to put the shovel down and start climbing out. Here are a few pointers to get your finances moving in a better direction.
If you’re going to claw your way out of a Christmas overspending debt, you’ve got to pull your head out of the sand first. That means taking a close, honest look at the damage done. Go back through your bank statements and other records and work out exactly how badly your budget got botched. Once you get into the guts of it, you might even find things aren’t as dire as they looked from the outside. Either way, you’ll have a clear picture of what you’ve spent – and that’s the first step toward getting back on track.
Look at what you owe
Paying off a debt can take some planning and self-control –but there are a few tricks that can save you a fair bit of cash. The basic rule of thumb is never to take on a debt without a plan for clearing it. That might be as simple setting yourself a repayment schedule you know you can stick to, for example.
If you’re lumbered with expensive debts like credit card balances, keep checking out your options for switching to a 0% deal. Your new card basically pays off the balance of your old one for you. You still owe the same amount to the issuer of your new card, obviously, but you’re ditching the expensive monthly interest.
Once you’ve got your existing debts under control, you can set out a plan to keep your head above water for the year ahead. After all, it’s never too early to start thinking about next Christmas! Just as an example, why not try out a simple trick like the 1p Money Saving Challenge? By saving just a penny on day 1 then putting away 1p more each day than you did the day before, you can save a total of £667.95 over a year. That’s enough to cover most of the UK’s average Christmas spend in itself!
Build it back, pay it forward
The other thing to put some thought into is mending the hole left in your pocket when you paid down those debts. There are loads of ways to do this, but a few quick tricks include:
- Earning quick cash by switching banks. You can actually find accounts that’ll offer you as much as £150 to switch over to them.
- Try out one of the many money-saving phone apps. Depending on the one you pick, your app could do anything from automating your monthly saving to giving you instant access to valuable discounts and other deals.
- Get your ongoing bills under control. For instance, take a look at our tips for keeping your energy bills low. Something as simple as nudging your thermostat down by just 1 degree could be worth as much as £50 off your heating costs over a year.
Most importantly, building back your finances means making sure you’re not leaving your tax refund cash in HMRC’s hands. Right now, an average 1-year refund could easily come to over £900 – enough to obliterate most people’s Christmas debts in a heartbeat!
Now that you’ve got your own financial house in order, remember that we’re all in this together. Share the tips that worked for you and - crucially - refer your mates to the UK’s leading tax refund experts for their yearly claims. We love it when happy RIFT customers spread the word about how we’ve helped them. That’s why our Refer a Friend scheme offers cash rewards and prize draw entries every time you do it! When someone you’ve referred to RIFT claims their refund with us, we pay you £50 – just for helping out a mate!
Find out more on our RIFT Refer a Friend page, and get those referrals in to start piling up the payments. If you've not claimed a tax refund yourself then check what you're due with our tax refund calculator. Only 1 in 3 claim backed what they're owed and around £300m a year doesn't get back to its rightful owners.