On the twelfth day of Christmas, my true love sent to me:

12     Presents want wrapping

11     Lights not working

10     Days of shopping

9       Cards need posting   

8       Games of charades    

7       Pounds of weight gain

6       Family visits     

5       Unwanted Gifts

4       Squabbling kids

3       Hangovers

2       Broken Toys

and a parcel still in transit 

With Christmas in the rear view mirror I’ve been thinking about all the stresses of Christmas. A friend and fellow coach, John Donaldson has renamed the 12 days of Christmas as the 12 days of stressmas and I don’t think he is too far off the mark.

Stressmas

One of the biggest causes of stress has to be the additional spending at this time of year. The Money Advice Service in the UK have recently released the results of their annual Christmas spending survey, the highlights being:

• Almost half of Brits will turn to credit cards, store cards and overdrafts to cover the cost of Christmas
• The average UK adult will spend £530 on Christmas
• This equates to a total ‘seasonal spend’ of £26bn, an increase of £2bn from last year.
• Despite this, 30% said they will find Christmas harder to afford this year than last year
• Around 1.4 million people are planning to use payday loans to help deal with the pressures of Christmas spending. It was estimated that 1.2 million used this option last year.

This increase in the use of payday loan provides is I believe, a huge cause for concern. A quick scan of a comparison web site shows a range of APRs roughly between1,000% to 6,000% in respect of companies who offer loan repayment terms of one month of less.

But what does this actually mean? Lets look at an example  of someone borrowing the average Christmas spend of £350

Scenario 1:  APR 1000%:

The total interest payable over one month would be £82.93, equivalent to an interest rate of 23%. If you let the initial amount borrowed of 350 roll over for 12 months, the total interest payable increases to £3500

 Scenario 2:  APR 6000%

Total interest payable would be 143.00 equivalent to an interest rate exceeding 40%. If the loan is rolled over for 12 months the total interest in an incredible £21,000

Around 1.4 million people are planning to use payday loans to help deal with the pressures of Christmas spending, a rise from the estimated 1.2 million who planned to use this option last year.

So, is this going to be the last year you overspend at Christmas? What can you do to ensure you are not in the same position next year. Here are some suggestions:

• Speak to your relatives and decide for whom you are going to buy presents. A few years ago My sister and I decided that we would only buy gifts for the children as invariably we were just sending each other tokens anyway. We then extended this to other members of the family with the result being saving of time and money
• Agree on a budget for gifts and make it realistic, particularly when buying for young children. The temptation is buy all the latest toys and games on the market. The realism is that the kids are more likely to be interested in the cardboard boxes in which they came
• Use social media instead of sending Christmas cards. A number of my friends do this and use part of money they save to make a donation to their favourite charity
• Start saving for next Christmas now

In my next blog post, I will look at the emotional cost of Christmas

Mark