Christmas money quiz could stop new year debt hangover

22 December 2004

Problem-solving charity Citizens Advice is inviting last-minute Christmas shoppers to do a quick and easy on-line quiz to test how good they are at handling money in the festive season.

The Christmas money survey – available at Citizens Advice website www.adviceguide.org.uk - offers people the chance to assess whether they are spending within their means or stacking up debt problems for the new year. The website also offers top tips for a debt-free Christmas, and help for people already in debt.

The quiz offers people a light-hearted analysis of their ‘money personality’, with profiles ranging from a ‘Christmas debtor’, whose motto is ‘live for today’ to a ‘smart spender’ or even a ‘squirrel’ who hoards every penny.

But there is a serious intention behind it all. The national network of Citizens Advice Bureaux – the largest provider of free, independent money advice in the UK – has seen a dramatic increase in debt problems over recent years. Latest figures show that the number of consumer debt problems dealt with by Citizens Advice Bureaux has risen by nearly three quarters over the last seven years.

Consumer debt issues seen in bureaux stood at 706,700 in 2003/4 compared with 405,800 in 1996/7 – a rise of 74%.

Bureaux dealt with nearly 1.1 million debt-related issues last year, a figure that also includes housing, utilities and benefits-related debts. But consumer debt is by far the biggest type of debt problem for which people come for help, and it is increasing more than other types of debt problem – by over 35,000 in the last year alone.

Citizens Advice Director of Policy Teresa Perchard said:

“Lots of us want to make Christmas special, especially for children. It’s all too easy to spend more than you can afford when the shops are overflowing with temptation and you’re bombarded with offers of easy credit.

“But we know from experience that the new year and spring is the busiest time of all for money advisers in Citizens Advice Bureaux, when people who have stretched their finances to the limit wake up to a debt hangover. That’s why we want people to take a moment to think about how well they’re managing their money and look at our top tips for a debt-free Christmas.

“For some people it’s already too late to avoid problems, but the message is it’s never too late to get free, confidential and independent advice on money worries from a local Citizens Advice Bureau.”

Citizens Advice top tips for a debt-free Christmas

Plan ahead. Work out how much you can realistically afford before you start spending. The worst way to do your Christmas shopping is at the last minute, in a panic, with a pocket full of credit and store cards.
If you can afford to, set a little aside each week for Christmas and save it in an interest bearing account. (Investigate saving with a credit union, where you may then be able to borrow up to 3 times your savings - contact www.abcul.org or 0161 832 3694 for list of credit unions and full details).
Set a limit on how much you are going to spend on each person and stick to it. Don’t leave it until the last minute when you might be panicked into buying things you can’t afford and the person probably doesn’t want.
Remember that Christmas is an expensive time of year for everyone. With some close friends and adults in the family you may be able to make a ‘no presents’ pact. Or agree to exchange only token gifts with a fixed limit on what you spend.
Try shopping with cash only - that way you can't spend more than your budget. But don’t be tempted to take out cash on credit cards or cash credit card cheques - you’ll be paying through the nose if you do. If you can afford to pay for your goods outright, don't be persuaded to take out credit unless it really does work out cheaper.
Try not to feel pressurized by children into buying expensive toys or other items you can’t afford. Explain the situation to them. And don’t be tempted to buy toys from home catalogues unless you've no other option - they can often work out more expensive.
Avoid store cards unless you pay them off in full and take advantage of discounts - most are poor value ways of borrowing money and many charge whopping interest rates of around 30%
If you do need more money, don't just run up an overdraft without talking to your bank - this will be much more expensive than if you arrange it beforehand.
Shop around, you may find it cheaper elsewhere. If you're using credit, shop around for the best deal, and check that the monthly instalments and the total charge are within your budget before signing on the dotted line. Look out for “interest free” deals, but check the time limit on repayment. You may find that you cannot repay it in time and the interest is too high.
Remember that the hefty winter bills start arriving in February when you’re most likely to be feeling the pinch after an extravagant festive season, so always allow for these in your budget. Make sure you keep up with all your priority bills over this period such as mortgage or rent, gas, electricity and council tax. And always check your meter readings – you may have built up credit if you pay by direct debit.
Finally, if you do run into debt problems, don't ignore them and hope they'll go away - they won't. Get advice as early as possible. Contact your nearest CAB for free, confidential, independent money advice. (See www.adviceguide.org.uk or your local phone book for details).

About the Citizens Advice service

The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers.
The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, sex, disability, sexuality or nationality.
Most Citizens Advice service staff are trained volunteers, working at around 3,200 service outlets across England and Wales.
Advice and information www.adviceguide.org.uk (external link).
Volunteer hotline 08451 264 264 (local rate).

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