THE Credit Union movement has issued an impassioned plea to cash-strapped households in the north to avoid moneylenders and getting into unnecessary debt this Christmas.
And it has set out a series of tips for Christmas financial planning, which include making a shopping list, setting firm budgets, and agreeing a spending limit with friends and family.
The Irish League of Credit Unions (www.creditunion.ie) says consumers are splashing out more money than ever before on Christmas, with the average spend in Northern Ireland in 2022 being £1,050.
And for some, resorting to a money lender is often seen as a way to meet their bills at this time of year in a bid to give their loved ones a Christmas to remember.
But Martin Fisher from the ILCU cautions against taking on such a loan, as it often comes with exorbitant interest rates that make it difficult to clear the debt and leads to even greater financial struggles for households.
He said: “We know people face additional financial burdens at this time of year and all too often credit unions see at first hand the devastating impact borrowing from a money lender can have on a household.
“That’s why we are appealing to anyone who needs some additional cash this Christmas to come talk to their local credit union. We’re a not-for-profit that is firmly committed to supporting people in need of help with living expenses.”
He added: “Credit unions are here to help members enjoy the holiday season without the woes of financial excess. There are no hidden transaction fees or charges. Loans can be as low as a few hundred pounds and are approved quickly. A repayment scheduled is agreed based on the person’s monthly income and their ability to repay the loan without adding additional stress on your finances.”
Martin says Christmas is a good time to focus on financial planning and household budgets, and insists there are many sensible things households can do to avoid getting into unnecessary debt. His tips for Christmas financial planning include:
It’s never too late to start saving:
Even putting away a little bit of cash each week between now and Christmas will add up. Have a goal for what the money will be spent on – food & drink for the festive season or a family trip to the pantomime.
Make a Christmas shopping list:
It can be all too easy to “shop till you drop” without a carefully set out financial plan. Make a list of what you need to buy and who you need to buy for. Divide your lists into categories that might include gifts, food, clothes, and socialising. Prioritise your spending and add up the estimated costs.
Set a budget for your Christmas spending:
Once you have a list of everything you intend to buy, set a budget for a reasonable and affordable amount to spend. Think carefully about your food shop and cut out the excess. Do you really need to make a sherry trifle because it’s tradition when no one will eat it? Many of us overindulge in sweets and treats at Christmas time, resulting in a huge amount of food waste.
Agree a spending limit with friends and family:
Many people will be struggling this Christmas. When you’ve worked out how much you can afford to spend on presents, talk to people you intend to buy gifts for. Maybe you can agree between you a reasonable limit on the cost of the gift. A Kris Kringle can mean buying fewer gifts and puts the focus back onto thoughtful giving.
Loyalty cards:
Loyalty and club cards are an excellent way of earning redeemable points and accessing deals or discounts. Sign up or check any pre-existing accounts to avail of the financial benefits on offer with different retailers.
Stream for free:
There is nothing like cosying up by the fire to watch a movie at Christmas. Many streaming websites offer a variety of different movies and TV shows to watch. Avoid the extra cost of subscribing to each individual site - many offer free week/month long trials.
Save on postage:
Online retailers offer discounted rates on postage. You might be purchasing several items at different stages in the lead up to Christmas. Instead of paying a postage fee each time, it may be worthwhile availing of a delivery subscription like Amazon Prime. And, for Christmas cards, use a free online service to send cards by email!
Martin added: “Our priority is to ensure our members enjoy a stress and debt free Christmas. It’s important to celebrate at this special time of year but do remember to set aside some money for January, to pay off the credit card and other bills. With a bit of forethought and planning, we can avoid the January financial blues.”
