10 steps to beating the shopping blues this Christmas
Nine out of 10 UK shoppers felt pressurised to overspend last Christmas, and almost half (46%) turned to credit cards, overdrafts and other forms of borrowing to help pay for their hoard. That meant one thing - they started the New Year in debt.
With three shopping weeks left, here are 10 financial mistakes to avoid at all costs this Christmas.
It's easy to get caught up in the hype during the run-up and think Christmas just won't be Christmas without those extra few stocking fillers for the kids or that festive bouquet to give the sitting room the final touch.
It may sound obvious but failing to stick to a gift list and a budget is a sure-fire way to spend more than you intend this Christmas. Last year, four million Brits said they would spend whatever they want and worry about the financial consequences later, according to a survey by Thinkmoney.co.uk. And worry about it later they did. In January 2013, 17% of British consumers admitted to starting the New Year still paying off their debts from Christmas 2011.
Sarah Pennells, founder of Savvywoman.co.uk, says: "Budgeting should be your priority this Christmas and something you do before you go near a shop or a retailer's website."
2. LOSING RECEIPTS
With so many things to buy and the countless shopping bags you end up with, it's so easy to misplace your receipts. And it's always the way that the item whose receipt you lost will be the one you want to return and get a refund for.
So get organised this year. When shopping in store, don't let the sales assistant put the receipt in the bag. Keep it safely in your purse or wallet and file them all in an envelope when you get home. At least then you'll know exactly where they all are.
But even if you do lose your receipt for something that needs returning, if you can match the price of an individual item to your bank statement, some shops are willing to accept that as proof of purchase.
3. BUYING FROM WEBSITES WITHOUT YOUR CREDIT CARD
Never buy something online and pay by bank transfer because you won't always be able to get your money back if the website turns out to be dodgy. Pay with your credit card if you can and then all purchases between £100 and £30,000 will be protected should anything go wrong by Section 75 of the Consumer Credit Act. Failing that, use your debit card as there are various chargeback schemes that offer some degree of protection too.
4. TAKING THE KIDS WITH YOU WHEN YOU SHOP
When you're running around doing all your errands, take the kids with you and within half an hour they'll be bored. Before you know it, you'll have spent money to put an end to it and give yourself an easier time. Maybe you've had to resort to spending a few pounds on a Happy Meal - or worse, maybe the only way to prevent a tantrum was adding an extra toy to the present pile. So avoid it altogether and go shopping solo.
5. NOT PRICE CHECKING
You can easily get what you want for less by spending a few moments to check the price online before you shop. Providing you won't incur delivery costs that could wipe out any savings, buying online can be a great idea - you'll beat the queues for the tills too.
There are also savings to be had in store. Some big retailers match prices if you can find the same items on sale in other shops for less - though they don't usually match online prices. John Lewis, for example, promises that if you find a lower price at another high street competitor "for the same individual product, sold with the same service conditions", it will match the price when you buy, or refund you the difference.
6. HAVING TO PAY LAST-MINUTE TRAVEL PRICES
"Demand is huge at this time of the year and by leaving it until the last minute, you could end up paying an eye-wateringly high price for your seat - that's if you're able to get one," warns Andrew Hagger of MoneyComms.co.uk.
While booking your Christmas journey well in advance can be a really big money saver, it's not too late to save on rail and coach fares. Booking just a week before you go can shave pounds off ticket prices compared to what you'll have to pay if you buy your ticket on the day.
7. BUYING EXTENDED WARRANTIES
These are in many cases a waste of money. The Sale of Goods Act 1979 states goods must last a "reasonable" amount of time. This amount of time is based on common sense - buy an electrical product for £10 and you can't expect it to last for years. However, if you spent £500 on a product and it breaks within two or three years, then the retailer has an obligation to replace it.
8. MISSING MONTHLY PAYMENTS
"Christmas is an expensive time for all, but it's not worth getting into a financial mess over. Missing your credit card or other bill payments may give you a bit extra in your pocket for Christmas, but the consequences are serious and could come back to haunt you for years to come," Hagger warns.
Missed or late payments will reflect badly on your credit score and could make it difficult and expensive to borrow money in the future.
9. PAYING FOR LAST-MINUTE DELIVERY
You've still got a few weeks to make sure your goods are delivered by the time you need them, so don't automatically assume you need to pay more for next-day delivery. Watch out for online sales where free delivery is included - you'll save yourself a few pounds on each purchase.
And don't forget about Click & Collect services, allowing you to order online and then pop along to your nearest store or even a local convenience such as a newsagent to pick up your items.
10. FORGETTING ABOUT VOUCHERS
Duncan Jennings, co-founder of VoucherCodes.co.uk, says: "By checking voucher code sites before making any purchase, shoppers are bound to find a relevant deal to knock down the price of their desired items without having to compromise on the quality. While this is a good practice to get into the habit of all year round, using discounts can really bring down the expense of winter festivities."
Also known as discount codes, promotional vouchers or promotional codes, online coupons or discount vouchers, are codes that can be entered at the checkout of many online UK retailers that gives you a discount against the item/s you are purchasing. The codes are generated by retailers and sent to certain members of the public to encourage sales.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.
Your credit score is a three-digit number (ranging from a low of 300 to a high of 850) calculated from the information in your credit report. Your credit score enables lenders to determine how much of a credit risk you are. Basically, a low credit score indicates you present a higher risk of defaulting on your debt obligations than someone with a high score. If you have a low credit score, any products you successfully apply for will carry a higher rate of interest commensurate with this risk.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.