Christmas comes but once a year…..thankfully….but it can be a time of overspending, wasting hard earned money on unwanted gifts and buying double the amount of food we would normally consume over what is essentially a few days. It is estimated that 21 million of us receive at least one unwanted present each Christmas, averaging a £41.70 spend per gift, meaning more than £5 billion cash is spent unnecessarily.*
That’s not to say that we shouldn’t look forward to and enjoy Christmas. It is typically a time of celebration and spending time with loved ones, but with all the media images we’re bombarded with daily, it’s easy to feel we need to consistently “keep up”.
There’s little wrong in using your credit card every now and then and paying it off at the end of the month. However, if you find yourself relying on credit to see you through to January, followed by high repayments for the next 6 months, it’ll get harder to reach a balance where you can start saving money regularly to avoid this situation. The average household spends £719.30 over the festive period which if multiplied by the number of UK households (27.2m in 2017) equates to £19.5 billion when rounded up.** Christmas 2017 UK shoppers spent an average of £452 each on credit cards; from 4000 consumers surveyed at that time, nearly a fifth overspent their original budget, half were worried they would still be paying debts off by Christmas 2018, and a tenth were still paying off Christmas from the year before. *** This begs the question, is it all worth it?
Many parents feel duty bound to spoil their children with vast quantities of presents, that if we’re honest, often lie forgotten about a few months later when the new craze appears. An emerging trend is seeing many families turning to experiences or home made gifts, not only to reduce the amount of plastic and packaging that is discarded annually, but to reduce the stress and expenditure that goes with Christmas. ****
This year why not give children a gift that will keep on giving – it may not sound exciting – but getting children familiar with investing at an early age will pay dividends in the future. Place some money in a junior ISA and make a point of regularly reviewing their balance with them. With so many online apps and investment portals now available, they can watch their money grow through their mobile phone and, where possible, top it up where funds allow.
If you don’t have children, find a similar investment strategy for your partner, friend or family member. The perception of needing existing wealth to start investing is, put simply, a myth. You can absolutely start small and with the right advice, over time, a financial portfolio can be built on a solid foundation, that allows your gift to grow into far greater significance for the time when it could count the most.
If you would like to discuss any independent financial planning needs, please contact us at firstname.lastname@example.org