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Are you tightening your belt post-Christmas?

Tightening the belt

Our research has found that millions of people relied on credit to pay for Christmas this year. And sadly many people are concerned their budgets will be squeezed even tighter next year. Are you one of them?

On the 23 December I took to the high street after work where I spent about four hours and £259. It’s stressful – devising and executing my entire Christmas-purchase strategy in a panic at rush hour, so I rewarded my efforts with a takeaway meal (£10) while I wrapped the presents. Pretty much the same thing happened last year.

Still, I don’t begrudge it one bit. You can’t put a price tag on the pleasure of meeting and sharing gifts with family and friends – and the expenditure and last-minute angst are an important part of the festive ritual.

Borrowed Christmas

While wages stand still and rising costs such as energy bills apply pressure to our household finances, a new Which? survey has found that one in five (18%) people have spent as much as usual on Christmas despite not being able to afford it.

With various travel costs thrown in (£90), my personal borrowing habits around this time of year broadly intersect with the average £350 found by the research. I’d also have to raise my hand as one of the 25% of people (13 million) who could only afford to pay for Christmas by borrowing: three quarters (76%) spending credit on presents, and 44% using it to pay for food.

And for different groups the costs escalate. 30-49 year-olds – who currently feel the most financially squeezed – typically borrow £490 to fund their festive spending. They’re also the most likely to have to dip into savings, withdrawing an average of £570.

It’s generally by around May or June that I make genuine headway in tackling the overdraft. I’m not alone here, either – with around 2.5 million saying it takes more than six months to pay off December’s debts.

Christmas on the cards

With Christmas-associated costs increasing, at some not-too-distant point I’ll inevitably find myself spending for one Christmas while still paying off the previous. If ever there was occasion for a New Year’s resolution, it seems now would be the time to shake the time-honoured habit of Christmas on the card.

There seem to be two means to this end: Improve the way I buy – pacing Christmas 2014’s shopping over the course of the whole year (rather than accruing a bombshell of debt over a few days in late December) – or simply buying less.

I’m optimistic that the former option is possible, as I’ve seen others succeed with it. But I’m also aware that if the good intention goes the way of most New Year resolutions, and I find myself back here at square one in a year’s time – it may be time to apply the same squeeze to next year’s festivities that many anticipate of household finances over next year.

Do you think you manage your Christmas costs effectively – and if so, what’s your secret? How are you planning on revitalising your finances in 2014?


We all have to learn to balance our income and expenditure. It is no good blaming discretionary spending if this gets you into debts that you cannot sensibly repay. No one else is responsible for your irresponsible spending, and no one else should pick up the tab. Let’s concentrate on those who are genuinely unable to make ends meet.

How about no.3 Save a little every month and agree with everyone a Christmas budget that fits in the the amount you’ll save.

“Are you tightening your belt post-Christmas?”

I don’t think I can tighten my belt much more, money wise 😮

Jim Bowen says:
30 December 2013

All on credit cards. No tax credits or anything else, wife a stay at home mum and higher tax levels. I have no money, no holidays away, take aways. But I enjoy seeing others making less spend more.

We learned many years ago that to live within your means is a much more satisfying way of life, paying off the credit card as it comes in, using one because it gives you another month to pay up.
Living on credit makes your purchases much more expensive.

When the penny dropped and we set about doing things differently, a challenge which made us rethink our way on life. cutting out every luxury, including the ever growing list of presents at Christmas other than our immediate family.

Our general rule of thumb is ask yourself one question “can I do without it? if the answer is yes then don’t buy it”.

Rewarding yourself with a Take-away after an expensive shopping trip is really alien to us. We buy a 6oz steak and cut it in strips for a home made chinese for two or three people. It tastes much better, its cheaper and takes 15 minutes in total to prepare and cook. Cheaper meals doesnt necessary mean less tasty or nourishing.

Our efforts this year include using 255 units less on the electricity than last year.which is just over 10% reduction. achieved by cooking in a halogen oven, an induction plug in hob and an EnergyEgg. You can nibble away at energy bills with very small changes

Sadly income (pension) static – FOOD prices INCREASED – So I’m worse off doing nothing – I have never been in debt – saved regularly – BUT IT COSTS ME MORE TO EAT according to my receipts. At 83 it will not improve unless we have a new government. Never ever vote Tory

I am not political, just want competent people managing our country. However the crisis that plunged our country into great debt (“there is no money left” to quote a departing minister) evolved under the previous “administration” so I wouldn’t vote for them either. Perhaps we should have a debate on how to find and employ those competent people we need in future – they are certainly not career politicians (a lot of lawyers it seems) nor career civil servants (who have never worked in industry). We could look to our most successful companies for clues.

Nope it was an AMERICAN BANK induced Crisis WORLDWIDE -That’s why so many countries were affected not just UK – If it wasn’t for Brown’s actions the chances are we would be far worse – after all the TORIES were complaining they wanted LOOSER restrictions – if you actually check the facts – our most “successful” companies are also the most self centred and greedy. We nee stricter restrictions on BANKS – they still haven’t been punished – only the old -poor and vulnerable have – for being old -poor and vulnerable – I’m one of them

The UK allowed its housing market and personal debt to get out of control, and did the same with public debt. We cannot blame everything on someone else. We also presided over the decline in manufacturing industry. Hopefully we will learn (for a while anyway) from our mistakes and trust that the current improvement in our economy will gradually lead to greater personal benefits and a little belt-slackening.

I profoundly disagree – It never happened before – won’t happen now – Greed will prevail –

No one forced world banks to buy up bad debt from the AMERICAN banks, in the speculative attempt to make even more money. The UK regulators should have been more awake and the government of the time should have been more awake. What we actually had was a government that was happy to let things go as long it was taxing the profits the banks made regardless of how dodgy the practice was. Whilst rewarding bankers with knight hood,. selling off most of our gold reserves at rock bottom prices etc.

And you mentioned your pension wasn’t doing well. I suggest very few people’s pensions are ever since a certain chancellor removed tax relief on pension investments. And it wasn’t a Tory chancellor. In fact it was the same chancellor that upped the age you could draw down from your retirement pot from 50 to 55.

I agree the current lot don’t seem to care about the “little” people, but one could equally argue neither did the previous lot. Which doesn’t leave a great choice come the next election.

And have you noticed that with 18 months to go things start happening, wonder why that is….

Which? December update includes:
‘Government must do more to help hard-pressed consumers’
Richard Lloyd, Which? executive director, said: ‘Despite continuing signs of an improving economy, it seems families are still really feeling the squeeze, with millions of households pessimistic about their finances in 2014 after relying on savings or debt to fund Christmas spending.
‘We want a New Year resolution from the Government to do more to help hard-pressed consumers in 2014 by getting a grip on the cost of essential bills and a resolution from firms to make sure they are giving customers the best possible value for money.’

I don’t suppose mine will be popular comments, but
– first, saving for Christmas is not a bad thing, is it?
– more to my point, I see this “New year resolution request” as an obvious statement – in the sense that of course we all want to be better off, but the real question is how that can be achieved. I would much prefer Which? to stick to giving advice on solutions rather than playing the popular card – the Opposition can do that. Government never have and never will provide all the solutions – they can only try to provide an appropriate economic framework. It is not within their ability to “get a grip” on world fuel prices, on food costs, and “firms” set their prices commercially, not to suit Government. Where they can help is in getting the whole system of taxation, welfare, and govt. spending on a sensible basis. Reducing taxes in one area puts them up somewhere else unless overall they spend less.
I would like to see continuity of sensible policies operated by competent people. No hope of that if the country is run by career politicians and cosseted civil servants.
I must get out more..