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Credit Crunch Christmas

Last update - Thursday, December 11, 2008, 12:22 By Christina Finn

Christina Finn looks at how we can beat the debt this festive season As Christmas looms ever closer, it is easy to get carried away in the hustle and bustle of things. The smell of pine trees, the glittery tinsel and the sparkly lights can get anyone in the Christmas mood, but the real spirit at this time of year is the spirit of giving.

No one likes to disappoint their family or young ones, but getting in debt at Christmas is becoming all the more common, and is an even bigger threat in this current economic climate. To avoid the look of disappointment on their children’s faces, some parents are going above and beyond what they can afford, getting themselves into some serious financial difficulty once the New Year is rung in.
But why? Why are people who are normally so sensible all year round suddenly blowing away their cash on unnecessary material goods? Is it to see that smile that lasts on their children’s faces for that split second before they move onto the next gift? Or is it deeper than that?
Emma Gilmore from Bray, a mother of a two-year-old with another on the way, says she knows all too well the pressures that Christmas can bring. In this time of economic crisis, everyone is tightening their belts, she says, especially when you have children to think about.
“I only have two more months to go and I’ll have another little one, so although this time of year is about spending, I also have to think about saving,” says Emma.
“I think it is ridiculous to spend so much money on Christmas. I’ve heard people can spend hundreds and hundreds, but why? Young children don’t know the value of what they receive, it doesn’t have to cost a fortune.”
The Minister for Social and Family Affairs, Mary Hanafin, has asked the people of Ireland to be prudent as we get closer to Christmas, and to avoid running into debt or visiting money lenders to cover their seasonal costs.
“We all know that it is very easy to get swept along with all the hype and fuss which the festive season brings. Taking simple steps and following practical advice from now on will help ensure that you do not get into debt which can seem like a black hole,” she said.
Hanafin also warned against an over-dependence on Christmas bonuses or overtime that may come as the holiday approaches.
“Every year we see the massive demands for Exceptional Needs Payments to cover heating and electricity bills which consumers are unable to pay,” she said. “Between December 2007 and April 2008 over 5,700 payments were made to individuals amounting to nearly €1.5m for the period around Christmas.”
The Money Advice and Budgeting Service (Mabs) has issued a special leaflet called ‘How to Manage your Money this Christmas’ to help people in dealing with the financial strains that this time of year can bring.
Mabs has provided some helpful hints that may assist people to budget into the New Year, advising that you decide exactly what you want to buy and how much exactly you want to spend, and stick to it. Shopping around is often a good idea; retailers know that spending will be down this Christmas and may slash some prices in order to sell.
The service also advises paying in cash when buying presents, otherwise that credit card bill will be a shock come January. Meanwhile, good friends do not need expensive gifts, so why not decide to just give each other a card and share a bottle of wine together, or even arrange a Chris Kindle with your friends or family so you only have to buy one gift.
It may sound stingy, but at the end of the day there is no reason to get yourself in the red this Christmas. “Putting in the effort this side of Christmas will definitely add up in the New Year,” said Annmarie O’Connor of Mabs.
None of us likes to think we have a debt problem, but the reality is that very few of us sit down often enough to work out exactly how much is coming in, how much is going out and where it is all going. Putting it all down on paper is the first step to drawing up a sensible budget, and can show you exactly where you are going wrong.
With easy credit available it’s all too simple to run up debts and then wonder where they’ve come from. And the lack of Christmas bonuses makes it extremely tempting to run up that credit card this year and think about the consequences later. But do you really want debt collectors banging on your door once the festive season is over? That is one sure way to take the smile off your children’s faces.

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