Five ways to avoid a festive fallout

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By Sarah Modlock

1. Plan Ahead

You don't need to get the fairy lights up in October but planning ahead for a date that has been a diary fixture for a couple of thousand years obviously makes good sense. Research by Nationwide Building Society on attitudes towards Christmas has found that one in five people are not looking forward to Christmas at all and 30% of people expect to go overdrawn during the festive period.

To avoid rows about cash and ensure you do not over-spend, start by writing down a list of names you want - or need - to buy for plus details of any entertaining or travelling you plan to do. Then set a budget with costs for everything and stick to it. Don't forget that January is a long month so blowing your December pay cheque too soon will just add to your stress.

Avoid arguments with your partner by finding a quiet, stress-free time to discuss your plans in advance. List all jobs that need to be done and decide who will do what. Card writing, present wrapping and work on the day can all be shared.

2. Avoid shopping traps

Your chances of over-spending and breaking your budget can be greatly reduced by a little bit of thinking and planning before you head off to the shops. Stick to your list. If you can, shop early to avoid the crowds and you have a better chance of getting everything on your list instead of panic-buying when items have sold out.

The supermarket provides a classic opportunity to spend more than you planned. These stores are actually designed to seduce you with items you did not plan to buy and make you feel good about doing it. Essential items such as tea, bread and milk are deliberately spread across the shop so that you are encouraged to go down each aisle. The way to beat the system is to draw up a shopping list before you go. Many people find this is a must-have, if only to help them remember everything from one week to the next. But your list can help you stick to buying just what you need. Be single-minded and never go food shopping when you are hungry. Planning the food and meals you need for the week could also save you shopping time. If the supermarket layout is familiar to you then you can head straight to the aisles with the items you need to buy and avoid the temptation of extras.

If shopping is your weak spot then try not to head to shopping centres for browsing but make sure any shopping trip fits in with your budget and has a clear agenda. You can also put less time on your parking ticket if you want to limit your risk of a splurge. Shopping online will cut out the nightmares of tackling the high street.

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3. Try using cash only

The idea of getting through Christmas without your credit cards may fill you with dread but it could save you months of debt worries after.

Try sticking to cash instead. Calculate how much cash you will need to withdraw for each day or better still, a whole week. Leave your credit cards at home - all of them - and brave the world of reality. If you normally use a debit card, avoid paying with it and stick to cash. This exercise is designed to re-acquaint you with money, remind you of the value of items you buy and make you think twice about your spending habits. It is so much easier to hand over a plastic card when you buy something, particularly if you know you cannot really afford it. This is particularly relevant with high street spending where you can kid yourself that £50 here or there may not make a huge difference. In reality, if you had to hand over five £10 notes you might feel very differently about the purchase. Many of us rely on plastic and it is easier to keep stretching our finances when we do not have to think beyond entering our four-digit PIN number.

At the end of your cash-only week, think about how many times you decided not to buy something because spending cash rather than using plastic made the item seem less appealing.

4. Just say no to store cards

Despite their bad reputation for eye-wateringly high interest rates, one third of adults hold store cards. And while 62% of cardholders pay the balance off each month, a third of them keep their debt going, paying off a little each time the bill comes through, at great expense. Carrying a balance on a store card is the quickest way to get into debt. For example, if you spend £500 on the Monsoon store card charging 29.9% APR and paid it off in 12 months, you would pay £120.29 in interest.

You could be offered a store card in nearly every shop on the high street and you would be hard pressed to find one which did not have an interest rate between 18.9% and 29.9%. This is more than double the standard credit rates available and is no contest for the hundreds of 0% deals around. Why would you pay a store money for the supposed privilege of using it's own brand account card to buy its products? Don't expect any help from the shop assistants pushing this plastic either. Beyond their commission the details are hazy. Last Christmas (cue music) consumer campaigner Which? trawled 10 Oxford Street stores that offer storecards. Not one shop assistant correctly answered all the questions put to them by Which?'s undercover researchers about important details like interest rates and late payment charges.

Just say no.

5. Avoid credit card cheques

One of the fastest ways to throw your money away is to use credit card cheques. These are usually sent out of the blue by your card issuer (handy for fraudsters since you are not expecting them so would not know if they are missing) and look almost exactly the same as ordinary bank account cheques but are often slightly smaller. They are usually charged at the same rate as cash withdrawals and you will also pay an immediate handling charge of between 1-2% plus a minimum fee of around £2 per cheque. With most lenders, you will also be charged interest immediately. Use them abroad and costs will be added for currency conversion. As if all that wasn't bad enough, the protection you get automatically with card purchases over £100 does not apply to purchases made with credit card cheques.

Feed them into your shredder and tell your card issuer not to send any more. Now if only you could do the same with those annoying family members who are coming for Christmas.

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