Plan ahead to save this Christmas

Plan ahead and build up funds in accounts with the best savings rates in order to stay out of the red this Christmas.

Ed Bowsher, head of consumer finance at lovemoney.com, said that people can make savings by planning ahead and budgeting carefully, with the weekly food shop a key place to save a few pennies.

He explained that in the run up to the festive period, or just throughout the year if people find it effective, households should make a list of things they need by checking their cupboards and then only buy what's on the list.

"Then you won't be tempted to buy food that will never be eaten," he explained.

However, he claimed that despite the temptation to go over the top for the Christmas festivities, he doubted that the period would cause a significant increase in credit card debt.

"The financial crisis has made a big impact on the psyche of the British consumer, and people now understand that excessive debt can be a milestone that takes years to pay off. So I think that people will try and rein in their spending as much as possible," Mr Bowsher said.

His comments contradict those of Andrew Hagger, spokesman for moneynet.co.uk, who claimed that a rise in credit card debt in the coming months is "inevitable".

He said while spending has reduced in light of the financial climate, Christmas is an expensive time of year and people will spend more than usual.

"People will always spend more at this time of year but I think people are being a little bit more careful than they perhaps would have been three or four years ago," Mr Hagger explained.

Nevertheless, he echoed Mr Bowsher's advice with regard to making savings on food shopping and suggested people use up everything they have in their freezers to save a bit of money.

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2011-11-02 13:18:00 © Moneyextra.com