Family Budgeting for the Christmas Holidays
How to Manage Money Via a Family Budget to Make the Best Christmas
Nov 16, 2009
Christmas can be an expensive time of year, catching people unawares as the new year dawns with the likelihood of large credit card debts. A great way of saving money is to spend only what is available. This will prevent the prospect of bank charges, late payments and unnecessary borrowing fees from shrinking the family purse.
Using 0% balance transfer credit cards, such as Virgin credit card or platinum credit cards from NatWest, HSBC or similar can save money so long as the account holder avoids putting purchases on them. When the term expires, borrowing rates resume and the customer could accrue unexpected costs. Unless the customer is vigilant in this respect, it might be wise to avoid credit cards altogether.
The Best Savings Accounts for Christmas Savings
Depositing money into a high interest savings account is a great way of making savings. It is worth noting first that it is better to use spare money to pay off any existing debts rather than to use it to save, as the debt will be more costly.
A cash ISA offers competitive interest rates tax free. If this is full, special regular savings accounts offer good saving rates so long as the account holder regularly deposits money into it. A standing order is the best way.
Working out how much can be deposited into the savings account requires working out the family disposable income first. This can be done by following these simple steps:
How to Make Money for Christmas by Household Budgeting
Ensure that all benefits are claimed. Directgov has an online benefits adviser, which calculates via questionnaire whether someone is entitled to certain benefits and tax credits
Ensure that money can be saved in other avenues such as house insurance, mortgage protection or by using energy saving appliances.
With these taken into account, working out a monthly personalised budget is the next step. This entails:
- Family income: Adding wages after tax with benefits and interest from savings over the year.
- Family expenditure: Adding all the annual household bills and expenses over the year. (Leaving no stone unturned is important)
- Monthly disposable income: Deducting the expenditure from the income and dividing into twelve.
Look out for any large one-off bills such as the MOT or household repairs that may need catering for. Making further provisions for (realistic) non-essentials such as nights out will ensure the final figure can be adhered to.
Household Budgeting for Christmas
With the amount worked out, the figure may be deposited into a high interest savings account via a standing order, where it may earn healthy interest throughout the year. It is a good idea to keep checking whether the savings account retains its competitive interest rates and to switch savers if this seems to wane after the first year.
Using a Debt Programme and Budgeting Finances
Avoiding credit card debt, making savings on household bills, claiming all benefits and making deposits into a savings account will have a surprising effect upon the Christmas budget. Spending only what is available as opposed to borrowing is a great way of saving money and obtaining peace of mind that Christmas debt need not be a worry once Christmas is over.
For those in need of debt assistance, however, National Debt Line (NDL) is a charity-run service that also helps find solutions and work out Debt Management Plans. For further advice, the Citizen’s Advice Bureau or Payplan offers a free service that provides useful contacts and debt advice.
HOL 101
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