Avoid more debts this Christmas
Christmas should be an exciting time of year.
But many people dread it as they worry about the money they are spending.
Year in, year out, thousands of people give in to the pressures of spending and run up huge amounts of debt throughout the festive season.
So what can we do to avoid getting into debt over Christmas?
Our advice is to plan, prepare and budget - and here are a few tips to help manage your money ahead of what can be one of the most expensive times of the year.
Budgeting
Work out your budget - decide what you can afford and stick to it.
Do not feel daunted by the idea of budgeting and do not feel pressured into spending more than you can afford to.
Your local credit union is a good place to start when looking for somewhere to help you start taking control of your money.
Credit unions are financial co-operatives owned and controlled by their members - people like you.
They provide savings, loans and a range of affordable financial services.
There are nearly 500 credit unions based in towns, cities and workplaces across Britain so the chances are, even if you have not heard of one before, there will be one near to you.
Credit unions are regulated by the Financial Services Authority (FSA) and are members of the Financial Services Compensation Scheme (FSCS), so your money is 100% safe.
As ethical organisations, credit unions look to find the best ways of helping members avoid getting into debt or taking out unnecessary loans, and they will take time to explain their products and give you the information you need.
Saving for Christmas
Credit unions offer a wide variety of ways to save, and most credit unions allow you to save in a separate account so you know that the money you set aside can be used for Christmas.
By making regular deposits into a Christmas savings account, members can relax knowing they have not had to run up huge credit card bills or taken out an expensive personal loan to pay for Christmas.
And members can spend the cash they have saved anywhere they want as they are not tied to using vouchers which are valid only in certain stores.
Many credit unions allow you to pay into a Christmas account straight from your wages or benefits - it is the easiest way to save as the money goes into the account before you see it.
Or you can pay into your account through local branches or collection points, or by direct debit from your bank account.
Credit unions do not have outside shareholders to pay.
The only people who benefit from the profits a credit union makes are the members who use their services, so you may get a dividend on the money you have saved as well.
Although Christmas will soon be upon us, it is not too late to start saving.
Try and get into the habit of saving a little each week or month; it is amazing how it can build up.
How to borrow money
If you do need to borrow for Christmas, credit unions offer great value loans too.
Many credit union loans will cost you no more than 1% a month on the reducing balance of the loan (an APR of 12.7%).
What this means for example is that if you borrowed £1,000 over one year, you would repay no more than £1,067 in total.
Many credit unions charge less, some may charge more, but by law this cannot be more than 2% a month on the reducing balance (an APR of 26.8%).
And credit union loans come with no hidden charges and no penalties for repaying the loan early.
Get free advice
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