Start preparing your finances for Christmas 2008

By MoneyhighStreet Staff. Published on December 28, 2007 This post currently has no comments.

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For some of us Christmas can be a time of heavy financial stress and may even be a time we are glad to see the back of. If you have struggled to make ends meet this Christmas you will want to avoid the same scenario next year. If so, you should start preparing now.

A large proportion of British consumers use their credit cards or some other form of debt to cover the cost of Christmas. If so, your first priority should be to clear any debts you built up over Christmas.

If you have a heavy credit card debt you should consider taking advantage of a 0% deal with a new credit card provider. This should give you at least six months breathing space in which to pay off the debt without having to fork out large amounts in interest repayments.

When you are planning for next Christmas the first thing you should do is write down everything you spent for this Christmas just gone. Take everything into account including gifts, decorations, cards, socialising and everything else you spent money on for Christmas. Add up everything and the total figure should give you a good idea of how much you need to save for next Christmas.

It is good to aim for this amount but there are good ways to reduce your total spend. For example, if you received any unwanted gifts this Christmas you may find use for the next Christmas. Alternatively, you could sell them on a website like eBay and put the proceeds towards next Christmas's shopping.

In fact, if you really want to get ahead of the crowds auction sites like eBay have loads of bargains at this time of year as thousands of people offload unwanted gifts. And this goes for online retailers as well, with many starting their sales on Christmas Day.

Also keep in mind that items like Christmas crackers, decorations and cards will be available for next to nothing over the next couple of weeks as retailers look to offload stock. If you have the storage space to keep such items why not buy them now?

If you are in a position to try to pick up some early bargains at this stage you may be able to reduce the total budget needed for next Christmas significantly. If not, you can still start preparing. Add up the total amount you will need and divide by 11. From January to November each year you will need to put this amount away each month to be financially prepared for next Christmas.

If, for example, you estimate you will need £2,000 for next Christmas, that means you will only need to put aside just less than £200 each month. If you already have a lot of debt to pay off this year it may be a bit of a challenge, but it will be well worth it. Christmas 2008 can be a stress free time and you will have no major debt worries to deal with in January 2009 if you start preparing now.

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