Avoiding debt over Christmas and New Year
Plymouth residents are being advised on how to avoid getting into debt this Christmas.
Christmas is traditionally a time of year when many people struggle financially and Advice Plymouth and Plymouth City Council are offering tips and advice to help people avoid debt and manage their finances.
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, Housing and Community Safety for Plymouth City Council said: “There is tremendous pressure on both families and individuals at Christmas time to buy lots of expensive presents, buy new clothes, spend money on going out, and buy expensive 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, so Christmas is unaffordable, but at the same time you do not want to let your family and friends down. Because of this, many people feel it is necessary to 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.
“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.”
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.
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, utility bills, food bills and other existing debts still have to be paid– and the consequences can be severe if they’re not.
- 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 - You can drop into the Advice Plymouth centre at Ernest English House, Buckwell Street, Plymouth PL1 2DA, on Monday, Tuesday, Wednesday and Friday from 9am to 5pm, and on Thursdays between 9am and 8pm.
You can also call Advice Plymouth between 9am and 8pm Monday to Friday, or on Saturday from 9am to midday, on 01752 520052 or 08444 111 444.
Credit Unions – There are two credit unions in Plymouth which both offer savings accounts and affordable loans.
City of Plymouth Credit Union – 14, Cumberland Street, Devonport, PL1 4DX. 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
