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Financial Problems Over Christmas 'Are Avoidable'

Oct 13, 2007
Consumers need to plan their finances carefully in the run-up to Christmas, an industry expert has declared.

According to Martin Lewis, creator of consumer website MoneySavingExpert, the festive period often puts Britons under increased pressure in their ability to manage their money. However, to avoid developing difficulties in handling their finances over the course of Christmas, which may see them struggle to pay utility bills and personal loans, people were urged to take the time to map out their outgoings. By starting to saving money now, he asserted that consumers could be in a much more favourable fiscal position in the new year.

Consequently, Mr Lewis advised that to lessen the "major financial burden" that is Christmas, by organising their spending now, consumers could find themselves in a better position to service demands on their outgoings over December. He stated that by planning to set money aside in the months preceding Christmas Day, it is possible to avoid trying to buy gifts and festive food, as well as regular spending commitments, all on December's income. Otherwise, the analyst stated, consumers may be left with "costly debts in January".

He said: "Christmas is on December 25th every year. So why do people act as if it's a massive surprise and try to pay for all this massive expenditure in January? If you don't prepare in advance, you can end up with serious debts and little to show for it. Yet get your act together right now, with a few easy actions and much of the damage is preventable".

"A common mistake is to decide what kind of Christmas you want first, then trying to get it cheapest. Yet instead of asking 'how can I get it cheapest?', people should ask 'what can I afford?'. Let Christmas be dictated by your finances because, lovely as it is, it's not worth ruining the new year for."

He added that those planning on funding their festive season by borrowing should do so with caution. With possible methods of getting credit including a personal loan, Mr Lewis urged consumers to be "sensible with [their] borrowing". In addition, it was recommended that shoppers should take the time to browse the market for the most competitively priced gifts and look to make use of discount deals offered by supermarkets.

For those Britons worried that they may struggle in meeting the costs of Christmas this year, taking a low-rate personal loan could well be advisable way in funding such expenses. However, when applying for a loan, prospective borrowers should always look to be honest when filling out application forms. Earlier this year, Cifas, the UK fraud prevention service reported that those who tell mistruths on their paperwork about how much they earn in an attempt to get a fast loan will only do further damage to their history. And as a result, this could deter financial providers from offering borrowers cheap loans or see them refused credit altogether. Peter Hurst, chief executive for Cifas, reported that lenders now use fraud data sharing to find out if applicants are attempting to disguise a bad credit history.
About the Author
Tom Dawson writes for Essentially Home Loans where visitors can apply for personal loans online, and also focuses on secured loans for UK residents. Visit Today: http://www.essentiallyhomeloans.co.uk
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