According to new research from moneysupermarket.com,
53% of people are worried about funding Christmas this year - that's
8% more than the number who worried about it last year. But the good news is there's still time to ensure you enjoy the festive season free from money worries. Here's how:
Start early
Your salary for December is going to be the same as in any other month so don't expect it to absorb the entire cost of Christmas as well as your regular financial commitments. Instead, use the time you have in hand to spread the cost of Christmas evenly throughout the next 10 weeks, buying presents as you go.
Alternatively, put aside a certain amount each week and spend what you have saved nearer the time. Don't forget to factor in the cost of food, travel and festive events as well as gifts when working out how much you're likely to spend.
Apply now for a 0% credit card if you can clear the debt
If you think you're going to be really stuck financially, one option is to spread the cost of Christmas on a 0% credit card. This means you won't pay a penny to borrow and can pay a set chunk off the balance every month, which should always be more than the minimum required, starting from the new year.
Crucially, however, this system only works if you clear the balance before the interest-free period expires. Most card providers offer between nine and 12 months interest-free on purchases but the market-leading card is the Tesco Clubcard credit card which offers 13 months at 0%. If you fail to clear the debt by then, however, you will be stung with interest at 16.9%.
Other top credit cards for purchases include the Sainsbury's Credit Card, which offers 0% on purchases and balance transfers for the first 12 months. Once the interest-free period is up, the card has a typical APR of 15.9%, so again you should try to clear any debts while you are on the introductory rate. Only Nectar Card holders can apply for the card, but the scheme is free to join and you can pick up a leaflet in store when you are shopping, or apply online.
The Barlcaycard Platinum with Purchase card similarly charges 0% for 12 months on purchases and balance transfers. After that the card has a typical APR of 16.9%. If you take out this card you'll qualify for the Barclaycard Freedom rewards system, which enables you to earn 'reward money' when you spend on your card at certain retailers.
You could also consider the MBNA Dual Card or the Virgin Money credit card, both of which again offer a 0% introductory rate on balance transfers and purchases. After the introductory period is up, both these cards have a typical APR of 18.9%. If you want the Virgin card, though, move fast as it will not be available after Friday, October 22.
If a credit card is your chosen course of action, get moving now, says Kevin Mountford, head of banking at moneysupermarket.com. "Anyone needing to borrow money on a credit card should be thinking about applying for a new product now to ensure they have it in time for Christmas spending."
Take heed of last posting dates
Meeting Royal Mail's final second class posting date of Saturday 18 December will save you a fortune if you have several parcels to send within the UK - as well as freeing up time and reducing stress levels nearer to the big day.
Don't pay over the odds for presents
Remember that shopping online for Christmas presents is usually the best way to pick up bargains. When shopping online, make sure you also start early so you can side-step the more expensive cost of fast delivery. Buying several items at once might also increase your total spend to a level which could mean you qualify for free delivery.
Set a budget of say £5 or £10 per gift per person to keep costs to a minimum.
Print off discount vouchers
These days you would be mad not to check out what discount vouchers are available online before embarking on your Christmas shop. moneysupermarket.com carries a whole host of vouchers from retailers and restaurants that you can just click on and print.
Other vouchers provide a code which you can enter into a website when you reach its online checkout to land yourself an immediate discount with no strings attached. Take full advantage.
Don't go overboard on the food shop
Supermarkets are masters at extracting cash from consumers and there is never a better time to do it than Christmas. But don't be fooled that top-branded goods are any better than the cheaper version - it's all about marketing.
If you really won't compromise on brands, buy the same products from a cheaper supermarket such as Morrisons or Asda. You can compare food prices before you buy on mySupermarket.co.uk.
Start saving for next year
Call it old-fashioned but the best way to tackle the cost of the festive season is to put aside a little bit of cash each month into a regular savings account throughout the year. "This can be as little as £20 to £25," says Kevin.
If it's too late for this year, make saving an aim for Christmas 2011. The market-leading easy access savings account is currently NatWest's e-savings deal, which pays a rate of 2.89% including a bonus of 1.85% for the first 12 months - just in time to cash in and start your Christmas shopping next year.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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