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Clever Christmas shopping starts here
By Emma Lunn
The thought of beginning our festive preparations before December fills most of us with dread. What with the ever-growing expense, crowds and carol-singers to contend with, it's no surprise that so many of us put off our Christmas shopping until the last minute. Fast-forward to January, however, and most of us are left dreading the arrival of our credit-card bill.
But if you start thinking about your Christmas spending now, there's a far greater chance you can avoid starting the New Year in the red.
Make a budget
The best way to keep your Christmas spending under control is to make a budget and stick to it. Work out how much you can afford to spend on each person, how much things like cards and wrapping paper will cost, and set aside cash for spending at Christmas parties and entertaining at home.
Sean Gardner, chief executive of price comparison website MoneyExpert.com, advises: "By putting aside even a small amount now, you can avoid the temptation to borrow money to pay for all those festive luxuries." He says more than 20,000 people called debt advice lines in the first weeks of 2006, and well over two million fail to pay off debt caused by Christmas spending within a year.
"Presents are not the only expense. Decorations, entertaining, food, wrapping, cards and other items all mount up and can break even the most stringent budget," Gardner adds.
Plan ahead
Despite being bombarded with tinsel, flashing lights and Christmas catalogues from the start of November - 1.2 million men typically leave their Christmas shopping until Christmas Eve. Research from National Savings & Investments (NS&I) shows that men are six times as likely to leave their shopping until the last minute, with just 1% of women admitting to the same eleventh-hour madness.
According to research by CreditExpert, last-minute panic-buying is the biggest stress factor over the festive season. One in three of us feel under pressure to buy expensive gifts for family and friends. With the average cost of Christmas rising every year, almost a third of those surveyed also confessed to worrying about their current credit situation.
Planning in advance what you are going to buy people is crucial. Get a few ideas from your friends, family and partner beforehand. That way you know you're getting them something they want and you won't end up panic-buying an unsuitable gift.
If you have a big family or large group of friends to buy for and not much cash to splash out, 'Secret Santa' could be the answer. Everyone's name is put into a hat and you buy a present - costing up to a pre-agreed limit - for the person whose name you pull out.
Go online
Research by electronic payment system PayPal shows that the people in the UK spent about £3.5 billion online last Christmas - and this figure looks set to rise.
The benefits of doing your Christmas shopping on the internet are obvious: no traipsing around stores, no pressure to shop before closing time, no waiting for the bus and no crowds. But how do you find the best deal online and is it really cheaper than the high street?
Online shopping robots or 'shopbots' such as Kelkoo search thousands of online retailers to come up with a table of the best prices for your chosen product. You just click through to the retailer's website and buy directly from them, and they deliver to your door.
There are plenty of shopbots, some searching everything and some specialising in certain products such as CDs, DVDs or books. Kelkoo, Pricerunner and Shopping.com (formerly Dealtime) are generally regarded as the main players for searching all products. But as they all list differing numbers of products from various retailers, it can be worth searching all three.
To stay safe online you should look for a customer service number and postal address for the sites you buy from, especially if you've never heard of the retailer. A quick phone call to confirm your order and delivery time can set your mind at rest. If you're buying a product for more than £100 it's a good idea to use a credit card as this offers extra protection: your card issuer will be jointly liable with the retailer for faulty goods bought in the UK.
Borrow sensibly
Few of us can pay for Christmas out of one month's salary, and if you've not managed to save enough for Christmas then credit might be your only option. However, if you do borrow, do it wisely.
During the festive period it's worth checking your bank balance more regularly - while overdrafts may be a convenient way of borrowing, they can be the most expensive. Find out what the exact terms are on your account or you could end up paying high charges and penalties if you go over your limit - as high as £39 for each transaction.
You may be better off going for one of the 119 credit cards that offer 0% on all new purchases. As long as you pay back the money owed before the introductory rate expires, there's no cheaper way to borrow money. But beware: if you take longer to pay off the card, you'll be hit with very high interest rates of up to 27%.
Shoppers should steer clear of store cards. The 10% discount for opening an account may seem appealing, but if you aren't disciplined in paying your bills you'll be hit with huge interest rates - often around 30% - that will wipe out any savings made at the till.
10 tips for stress-free shopping
Start sooner rather than later to avoid panic-buying.
If you're struggling for ideas, ask the people you are going to buy for what they would like.
If you want the gift to be a surprise, ask other friends or family members for tips.
Don't wander around the shops aimlessly - write a shopping list.
Do as much shopping as you can online.
If you don't want to buy expensive items online or want to see them first, use the net for research. This will give you an indication of how much you can expect to pay for items.
Consider taking a day off work rather than struggling with the weekend crowds.
Ask for a gift receipt (which does not show the price) - if your gift doesn't hit the spot, your recipient can exchange it easily, without embarrassment.
If you're worried about how much you might spend, leave your credit cards at home.
Treat your friends or family to dinner or an evening at the theatre instead. No shopping required and you both get a treat.
Case study
Liz Taylor, from Gravesend in Kent, starts her Christmas shopping in September. Including her husband and two young children, she has a total of 42 people to buy presents for. "I mainly buy for friends and family, friends' children and my children's friends," she says. "I set a budget for each person. I spend more on family and close friends, and about £5 a present for other people's kids."
Liz, a nurse, spreads the cost of her Christmas shopping over three or four months and tries not to use her credit card or get into debt.
"In the run-up to Christmas I normally do three extra night shifts at work, which brings in an extra £600 and pays for the bulk of Christmas," she says. "I do some shopping on the internet and like to find bargains on Amazon and eBay. I like to go round the shops too, although I avoid it in December, but I normally have all the shopping done well before then anyway."
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