How to start saving now for YOUR Christmas treats


The festive season may seem a long way off but planning ahead now can give you a more affordable Christmas.

You could start saving up in advance – and what better time than right now?

If you can get ahead of the game while the days are long and the nights are short, the chances are you won’t have to rely as much on credit cards and the overdraft to meet your yuletide spend.

The Bank of England estimates that the typical household spends £500 extra in December, including an extra 10% on food and 20% more on alcohol – although the main expense is buying gifts for others.

It varies across the UK, of course, with Experian revealing Glasgow folk spend the most on presents for other people, while citizens of Nottingham spend the least.
 
More worryingly, their stats show the average Briton takes over three months to pay off their festive debts with one in seven still feeling the effects of their Christmas splurge in June.

So if you always get caught out by the cost of the turkey, baulk at forking out over £50 for a genuine, freshly cut tree – or run out of time and money to get the gifts you’ve had your eye on… why not get ahead of the game and reap the benefits of regular saving?

Work out what you need, what you can afford, and make it a regular habit.

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You could join a Christmas Club at your local pub, social club or shop, start making better use of your building society savings account – or take out a Cash ISA.

Any of these options could leave you debt-free by the time you’re celebrating the New Year.

However, with a Christmas Club you won’t get interest on your savings and they’re not protected or regulated by the Financial Conduct Authority.

And while a credit union may offer a dividend on your savings, you’ll get tax-free interest* from a bank or building society savings account, legal protection – and the chance to draw money out early if pre-Christmas sales tempt you into an early bargain buy.

You can pledge to save a certain amount each week, and put aside your new £2 coins every time you get one in your change to give the total a welcome boost.

The benefits of a more formal arrangement – rather than stashing it in a jam jar at home – mean there’s less temptation to dip into the savings early, and you can save small amounts, because sometimes as little as £1 is required to open an account!

Check how much notice you need to give for withdrawals, see if there’s a better interest rate for regular savers.

Whether you’re saving for Christmas or another big event, a Cash ISA may give you the best return, although there are government limits on what you can save, and different accounts for different ways to access your money.

Top tips for Christmas savers:
  • Start as soon as you can;
  • Save regularly – be strict with yourself;
  • Deposit the cash somewhere you can’t be tempted to spend it;
  • Create your own budget to see what you might need to spend – and when.
*Tax-free if tax earned stays below the PSA
Experian figures relate to Christmas 2016.
Bank of England figures based on ONS 2015 spending stats.



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