Tips to Steer Clear of Debt This Christmas

23 December 2015, 14:05 | Updated: 23 December 2015, 14:39

Christmas is almost here, so we have some last minute advice if your bank balance is starting to suffer.

Today is the busiest shopping day of the year and supermarkets reckon they'll sell four times as much food today as a normal Wednesday as people stock up for Christmas.

According to the Centre for Retail Research, households last year spent a whopping average of £775 just on Christmas.

That sum includes not only presents, but also food, décor, and travel arrangements.

One third of families will pay for Christmas with credit cards, and over a million are thought to use payday loans for this purpose.

There are ways you can be generous this holiday season without capsizing your financial ship to do it. Here are Carrington Dean's 9 tips to help you save money.

1. Start with your budget first.

Instead of simply going out and buying everything you feel like your relative and friends want most, why not actually calculate how much you can afford and then go shopping? All of us have expensive items we dream of owning, but most of us have some more down-to-earth items on our wish lists too.

Remember, being generous isn't about overextending yourself. Take care of yourself and your spouse and children first. There is ultimately nothing generous about putting your whole household in debt!

2. Don't forget your monthly bills.

It may be the season of giving, but you can bet your utilities company isn't feeling generous. You still have to pay rent, council tax, electricity, water, internet, and insurance bills. Don't forget about these when you are figuring out your shopping budget.

3. Don't leave your shopping to the last minute.

If you don't plan then you're likely to panic, and it becomes more likely you'll blindly make an expensive purchase you really can't afford. Plus, you will miss out on good deals as you'll run out of time to find best deals.

4. Limit your gift list.

I know what you're thinking. You can't leave anyone out, can you? But if you have a big family or lots of friends, maybe you should think about it. We enjoy giving gifts, but let's be honest. A lot of the gifts you give might really be out of obligation. You can be sure you are not the only one who feels that way, so talk to your family. Explain your situation. Agree to skip out on gifts this year, to only give handcrafted or low-cost gifts, or just give gifts to the kids. The people who love you will understand!

5. Pool your gifts

Teaming up with your other family members can help you get your loved one's better gifts while also relieving part of the cost. If you normally spend £30 on a present for your mum for example, pooling your contribution with a couple of siblings gives you a larger budget, and also saves you money. Perhaps say three of you could afford that £60 perfume your mum wants, saving you each £10. It might not sound much, but doing this for each present adds up.

6. Stick to one gift!

It is always tempting to get a wee extra gift, but as you know every little adds up. Think, how often do you remember the wee extras, and how often will the recipient use this gift? If in doubt, leave it out.

7. If you must shop on credit, avoid payday loans.

If you absolutely cannot talk yourself out of a pricey purchase you cannot afford to pay for out of pocket, make sure you are dealing only with a reputable lender. Your local bank or credit union or the store itself are probably your best, most trustworthy, and most affordable options.

Avoid letting yourself get lured in by payday lenders. They may be more willing to overlook a poor credit rating, but you will pay for it exorbitant interest and fees later. For many Scots, payday loans are the start of a vicious, never-ending cycle of debt.

8. Shop around for the best prices.

Whether you are buying an item out of pocket or are planning to use credit, it pays off-literally-to shop around and find the lowest prices. You can save hundreds of pounds on expensive electronics like flat-screen TVs, laptops, and smartphones.

9. Start planning for next year.

Seriously, you probably learned a lot this year not only about budgeting, but also about what your family and friend's wish lists. Next year, don't wait for the last minute; start your Christmas shopping early. Buy gifts throughout the year as you stumble across items that you know your loved ones will adore. Take advantage of flash discounts that everyone else is missing out on. You'll save time, money, and headaches, and next year when December rolls around, you may even be all set for Christmas and on budget.