For the majority of people, Christmas is a time of presents, parties, spending time with family and eating too much.
But for a growing number of people, the festive season can be one of misery due to increasing amounts of debt.
According to the latest figures from the charity Credit Action, the
average adult consumer in the UK has borrowed £4,678 via credit car
ds, hire purchase, overdrafts and unsecured personal loans and Britain's personal debt is increasing by £1 million every four minutes.
Christmas time is the worst time for people to get into debt. Due to the higher financial demands placed on them by the festive season, coupled with the rise in advertising and appealing offers of credit
deals, many people find themselves borrowing money they are simply
unable to pay back.
Martin Lord, manager of the Northampton branch of the Citizens Advice Bureau (CAB) in St Giles Street, believes that many people simply do not anticipate the financial demands that Christmas places on them.
He said: "Most people live on tight budgets for the rest of the year, where their income generally matches their expenditure, however at Christmas there are presents as well as travelling and food costs to account for and many just put these costs on credit cards."
Despite this, Mr Lord believes the majority of borrowers are not simply
irresponsible with their finances, but have a change in circumstances
which results in them not being able to pay back what they owe.
He said: "A very small proportion of our clients are reckless and just
spend too much. The majority of them suffer a bereavement, a relationship breakdown or a redundancy that means their financial situation changes dramatically."
Steve Thomas, who works for the Northampton-based advisory service
Welfare Rights in Hazelwood Road, agrees the majority of borrowers
find themselves in financial trouble for innocent reasons.
He said: "I think peer pressure can play a massive part in Christmas debt problems. Many people see other people spending over Christmas, or are under pressure from children to buy them the
latest gifts, and unfortunately a lot of people are simply not in the position to spend that much so they get into debt."
One of the main ways you can keep a track of your spending is through careful budgeting. As well as Christmas presents, you also need to take into account any expenditure for travelling, food and drink and the extra socialising that occurs around the festive period.
Robert Butler, an independent financial advisor from Northampton, believes strict budgeting is the easiest way to keep a track of your finances at Christmas.
He said: "The thing to do is to make a budget for everything you will spend over Christmas. So make a list of the people you need to buy
presents for and an amount to spend on each, then money for food
and socialising and make sure before you go shopping that you can
actually afford to spend that much.
"Once you've done a budget, make sure you stick to it."
For many people, credit card deals during the Christmas period are the main root of debt problems.
Until recently the credit industry was considered to be irresponsible
in the amount it lent to borrowers.
However, in recent months the industry has tightened up its procedures.
Mr Thomas said: "Over the pastfive to six years, lenders have not
been doing the necessary credit checks when people have applied for credit and so vulnerable people have very easily found themselves in debt.
The system has been looked after very shoddily but now it has tightened up."
He added: "However, a lot of people do know what they're getting into when they borrow money so both sides are at fault."
According to Mr Thomas, for people from low income backgrounds, assessing credit should only be an option in an emergency. If you want
to save money in a safe and responsible way there are many options
available for people with lower earnings.
He said: "One way to save is to get involved with a credit union or
use a social fund. These services may both offer limited amounts
that you can get, however they are safe, they are cheap and there
is no interest charged."
Other ways to budget for Christmas is through a standard savings account with a bank or building society (some building societies even offer special Christmas savings accounts) or through supermarket stamp
schemes and Christmas saving clubs.
All these options allow savers to put by money at an affordable rate
and will result in a lump sumto use to cover expenses during the festive
season.
However, it is always advisable to shop around for the best saving
solution for your individual financial needs and to check the details
of the scheme. Last year savers using the Farepak Hamper scheme
had their Christmases ruined when the company collapsed.
However, if you do find yourself in financial difficulties in the New
Year as a result of overspending at Christmas, it is important to
sort the problem out immediately.
There are lots of free and impartial debt services in Northampton, including the CAB and Welfare Rights who can offer specialist debt advice and solutions.
To deal with the growing issue, the CAB has devised its 10
top tips for staying out of debt this Christmas.
The tips come in a handy credit card sized formand can be obtained from their offices or by phoning 0844 855 2122.
