Avoid a New Year Debt Hangover

28/11/2007

The Christmas period through to New Year’s Eve has always presented a challenge to thriftiness, with this year being no exception. A spending increase of nearly 4% on last year's £77 billion splash out is predicted. The website Female First has published a short guide advising how to manage your finances and avoid seeing in the New Year with a mountain of debt.

The website advises paying essential bills such as electricity, rent and credit cards as soon as possible – not letting them build up past New Year’s Eve. Once the bills are out of the way it will be possible to budget for New Year’s Eve and the festive season with the left-over cash.

Work out exactly how much you have available to spend, who you want to buy presents for and how many nights out you have coming up. Work out what it will all cost and stick to the plan. Online shopping can be a way of avoiding the temptation to overspend.

If people need to use credit to pay for their New Year’s Eve revelries the website advises choosing wisely. A credit card with a long 0% interest period on purchases is usually a good bet bearing in mind the general rule that if you can't afford to pay it off in total over 6 months, you can't afford to buy it. Store cards should be avoided with massive interest rates – often nearly 30% APR.

New Year’s Eve is a night to celebrate and be happy, so the website advises people not to cripple themselves with debt, starting the New Year with repayments they can’t afford.