- Almost half (44%) of festive shoppers overspend at Christmas
- One third (31%) of Brits plan to formally borrow money to meet the costs of Christmas
- 7% of Brits would sooner get into debt than consider reducing their festive spending
Almost half (44%) of Brits
overspend in pursuit of creating the perfect Christmas for family and friends,
according to new research from TSB.
Driven by pressure to appease
loved ones, more than half (54%) of Brits don’t even set themselves a budget
for their Christmas spending. In some cases this has included forking out on
gifts including designer puppies at £500 a pop, ponies and a houseful of new
carpets for the in-laws.
Peer pressure is also responsible
for loosening purse strings as more than one in 10 (12%) admit that they
overspend to ‘keep up with the Jones’s’, even if they can’t afford to.
With one in 10 admitting to
living beyond their means at Christmas, it’s unsurprising that many shoppers
are planning a ‘Christmas on credit’ this year. In preparation for their
splurges, 7% of Brits would sooner get into debt than consider reducing their
festive spending and 12% are planning to take a ‘buy now, pay later’ attitude.
Almost a third (31%) of Christmas
shoppers will make formal arrangements to borrow money specifically to cover
the costs of Christmas. Using a new or existing credit card is the most popular
choice with almost a fifth (19%) planning to pick up the plastic, followed by
overdraft extensions (5%) and taking out personal loans (3%).
While the majority of spenders
expect to have repaid any extra debt they took on to cover the costs of
Christmas within one month, 13% think it will take them up to three months,
while 1% expect to be paying the price until the following Christmas.
However, Christmas spending isn’t
only hurting pockets, it’s also causing some people to feel anxious (36%),
under pressure (27%), worried (26%) or guilty (21%). A fifth (19%), on the
other hand, feel ‘nothing at all’ when they spend too much.
To help ease the potential burden
of Christmas, TSB is partnering with TV psychologist Corinne Sweet, to help
shoppers pause and think before stuffing their Christmas stockings with
unnecessary gifts, while also knowing the options available to them when it
comes to getting in control of their finances and debts.
“Psychologically-speaking, the ‘urge to splurge’ is very tempting, especially
at this time of year, and when you want to make your loved ones feel you
care. No-one wants to be a ‘scrooge’ but, the financial headache that
follows when the bills come in during the New Year, can kill the delight of
giving too much. There is often a pull to go with the latest trend, to
keep up with friends and family, or to ‘buy love’ at Christmas. Sadly,
this seldom lasts. Far better to make an effort to give thoughtfully, not
least if you are someone who likes to splash out. You can end up feeling
disappointed (and grumpy) when your generosity is not reciprocated. Try
making a budget, and also being creative and thoughtful about presents.
Spending time with a loved one can be even better than spending money - so be
more watchful of your urge to splurge and you may stop yourself having nasty
surprises in the New Year.”
Smith, Head of Personal Loans at TSB, says: "For many people, Christmas is
a time to be merry and celebrate with loved ones, so it’s unsurprising that
many people feel the pressure to make it a success. As we all know, it’s only
too easy to get carried away when it comes to Christmas shopping and even the
best intended budgets can soon fly out of the window.
encouraging to see that many of those taking on debt to cover the costs of
Christmas do so for just a short period, but it can easily become a burden to
pay off – particularly if borrowers don't know their interest rate.
see if people could save money, or switch to a better rate, it's crucial they
first of all dig out their credit card or loan statements, find out their
interest rate and work out exactly how much they are being charged each month
for their borrowing. They should then shop around to see if they could reduce
the interest they pay, or use online tools, including TSB's debt consolidation
calculator, to see if they could reduce their monthly payments or possibly be
debt-free faster by switching their borrowing.
borrowing well doesn't just mean moving debt to a cheaper rate, it also means
making sure any future spending is planned for and is affordable. We'd urge
people to keep a track of their spending, to make sure any money they have
going out, is covered by the money they have coming in.
methods of borrowing, such as credit cards, can cost more than others;
particularly if being used for longer periods, so it’s really important for
people to compare all the options open to them, and seek free, independent
advice on managing their debt from organisations like Citizens Advice or the
Money Advice Service."
Corinne Sweet's top five tips for budgeting this Christmas
- When you feel the 'urge to splurge' at Christmas, either out shopping or on your PC at night, give yourself a moment to reflect. Go away from the shop or the screen, and take time to think if you really want to spend that much.
- Money can't buy you love - better
to buy one or two really nice things (that can be changed), than a barrel-load
of stuff. If your partner/ spouse is stuck on what to buy you – give them
tips so you are not disappointed. And you could set a mutually agreed
budget to deflate any rows later.
- Make a budget – even though this feels it is against the spirit of the season, include in the extras, the Christmas stockings, the food, travel, shows out, and buy your presents, as far as you can, accordingly.
- Be thoughtful about who you give presents to – it is possible to give too many or too much, if you are a spender at heart. You can hand make things or give a gesture and be savvy in your buying – a little goes a long way.
- Don’t leave yourself out – give yourself a nice present, and you will feel less ‘empty’ as we often give to others what we want for ourselves. Within your budget, give yourself a nice jumper or haircut, as part of the Christmas season (even a day at the spa would help relax you). We often overspend when we feel we need something for ourselves – ironic, but true.
Notes to editors
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