Avoiding debt before and after Christmas

Plymouth residents are being advised on how to avoid getting into debt before and after Christmas.

Many people struggle financially at Christmas in particular, and Advice Plymouth and Plymouth City Council are offering tips and advice to help people avoid debt and manage their finances.

Figures released this month by the national StepChange Debt Charity show that 804 people in the Plymouth area called its helpline for advice in the first half of 2015 with average debts of £11,358. On average, they owed £11,358 and had £2 remaining after paying their essential bills

Around a third of adults in Plymouth are over-indebted and Plymouth has higher levels of problem debt than any other local authority area in the South West. In addition, Plymouth is the 48th most indebted out of 406 areas nationally. (Source: Money Advice Service Indebted lives: the complexities of life in debt November 2013).

Councillor Chris Penberthy, Cabinet Member for Cooperatives and Housing for Plymouth City Council said: “There is tremendous pressure on everyone at Christmas time to buy lots of expensive presents, buy new clothes, spend money on going out, and buy extra food. We all know that this is not really necessary but it can be difficult to resist.

“Some people are struggling to make ends meet throughout the year. Christmas can be really hard to afford, but at the same time you do not want to let your family and friends down. Because of this, many people borrow money but it’s really important to think carefully before you do. It’s not a good idea to borrow money for something that is so short term. Be sensible about what you spend over the next few weeks and I hope everyone has a happy Christmas and a prosperous New Year.

“It might not be in time for this Christmas, but Credit Unions are a great way to save up for next Christmas. If you are experiencing financial difficulty, speak to Advice Plymouth to find out what your options are.”

A spokesperson for Advice Plymouth said: “We provide advice on a range of issues including debt, legal, relationships, benefits, tax, family, employment, consumer, travel, gas, electricity & water debt, health & care.

“The best advice is to seek help or information early to deal with financial worries before they become problem debts. At Advice Plymouth we have both generalist and specialist debt advisors, the water debt gateway and fuel advisors.

“Christmas is always the time of year when there is a big temptation to overspend, but the following top tips can help you to budget and have a better looking bank balance to start 2015.”

Top Tips for Christmas

Plan ahead - work out how much you are going to spend on each person - and stick to it.
Don’t forget the everyday bills - Remember that rent, the mortgage, council tax, utility bills, food bills and other existing debts still have to be paid– and the consequences can be severe if they’re not. If you approach organisations early, they can often give you options to spread the cost.
Don’t bank on an overdraft - If you need more money, don’t just run up an overdraft without talking to your bank first - it will work out much more expensive.
Keep things simple - If you can afford to pay for your goods outright by cash, cheque, or debit card, don’t be persuade to take out extended credit agreements unless they really do work out cheaper.
Shop around - Try as many places as possible to find the best price. Buy what you want and not what other people say you need.
Buy safe to be safe - Whatever the deal, whatever the temptation, don’t buy from unauthorised traders and don’t borrow from unauthorised lenders. The initial savings and convenience may prove to be false economy.
Read the small print - Check for hidden extras in any credit agreement. Work out the total amount payable. Ensure that the monthly instalments are within your budget before signing. Interest free credit can seem attractive, but if you don’t pay on time, or miss a payment, you could have to pay a lot more.
Do your own credit checks - Some cards charge high interest rates, but provide interest free period or discounts. Budget for all these costs and put the payment dates in your diary.
Be organised - If you’ve borrowed money don’t forget that it won’t be long before you have to make a payment. Make sure you pay on time, even if it is only the minimum, or you will be faced with additional charges.
Start planning and saving for next Christmas - Once Christmas is over, it’s worth looking at what you did well and what you didn’t. Learn from your mistakes and start planning how you will do things differently next year.

Further information

Advice Plymouth - Advice Plymouth is a service commissioned by Plymouth City Council and funded by the Big Lottery. It is an award winning partnership led by Plymouth Citizen’s Advice and the core partners are Age UK Plymouth, Routeways and Plymouth Guild.
You can drop into the Advice Plymouth centre at Ernest English House, Buckwell Street, Plymouth PL1 2DA, on Monday, Tuesday, Wednesday 9am - 6pm and Thursday and Friday 9am - 5pm
You can also call Advice Plymouth on Monday Wednesday and Friday 9am - 6.30pm, Tuesday and Thursday 9am - 8pm and Saturday 9am - 1pm on 03444 111 444.
City of Plymouth Credit Union – 26 Frankfort Gate, PL11QD. Call 01752 201329 or email office@cpcuco.uk
Hope Credit Union – 142, Union Street, Stonehouse, Plymouth, PL1 3HL. Call 01752 301871 or email office@hopecreditunion.co.uk
StepChange Debt Charity – You can call the national StepChange Debt Charity helpline for free, impartial advice, on 0207 3914583.