Sharing life’s special events with family and friends is hugely important for most of us and we want them to be as memorable as possible. But what may be good for your ‘feel-good factor’ can spell bad news for your bank balance. And the bigger your circle of friends, the more you’re going to spend on presents and celebrations!
Some of us will be invited to no less than ten celebrations over the coming year including weddings, christenings and ‘big number’ family birthdays – all of which cost us on average £120 a time. Plus, with over 10% of us saying we have no savings, these special events can end up leading us into expensive overdrafts and loans with high interest rates.
So here are my top tips on how you can budget and prepare for those special occasions meaning you’ll enjoy them without breaking the bank.
We’re each expected to spend £560 this Christmas. It may seem a lot, but think about everything from presents and cards, to the tree and all its trimmings, and you can suddenly see how it all adds up. In an ideal world you’ll have been sticking something aside all year, but if that’s not the case and you need a short-term cash loan, be clever about where you get this cash injection so that, in the long run, you pay back as little as possible.
Don’t extend your overdraft or take out a loan, as this can cost you money with fees and interest. Instead go for a credit card with a 0% deal on ‘new purchases’. Current deals* include the Tesco Clubcard credit card and the M&S credit card; both offering fifteen months interest-free credit on new spending. But they’re always changing so if these deals have run out, then shop around to find somewhere else that is offering 0%.
Just make sure you repay the balance in full before the deal ends or you’ll pay interest, so set up a direct debit from your bank account each month - deals like this can be withdrawn if you’re late with payments.
Next year’s summer holiday
You should start by putting something aside every month from now on, as you’ll need at least enough for a deposit when you come to book your trip. The best way to do this is by setting a ‘savings goal’. Only 30% of us do this, but research shows savers with a goal in sight manage to save £140 a month compared with just £97 a month for those who don’t. So set a target and you could boost your savings by £500 a year!
In fact, this rule should be applied for anything you need to save up for – birthdays, anniversaries, weekends away, weddings and so on. Having a goal will make it that much easier and quicker.
But where should you put this money that you’re saving up? If you haven’t already got a cash
Most accounts let you save from £1 plus and most have instant access, so if you do need to withdraw the money, you won’t be charged a penalty fee.
Over 40% of us splash out up to £500 a time on our child’s birthday so if you’ve used up your
When it comes to getting the best rates; online savings accounts normally pay more than the branch-based ‘passbook’ style accounts. The Sunday papers often have good tips on the best deals in the money pages, which will help you find the best and most profitable place to keep your money.
These tips will help you prepare for next year’s special occasions, but you’ll also benefit by planning ahead for the bigger events in your life down the line.
When you’re looking at your little baby, or even if your children are a little bit older, university days may seem almost unimaginable. But when it’s your children’s time to go to uni, they could be saddled with a £60,000 debt on graduation which has covered the cost of their tuition fees, accommodation and spending.
For long-term saving, share-based accounts, (where money is invested in the stock market), usually produce far better returns than standard bank or building society savings. There’s a range of products to choose from, with varying levels of risk, so it’s best to take financial advice on which option is right for you, and remember the stock market can go down as well as up so don’t invest too much in any one place. Don’t just go to your bank as they can only push their own services; take independent financial advice by contacting www.unbiased.co.uk where you will find details of regulated advisors in your area.
And another option for the long term is the new Junior
Saving can seem a bit daunting, especially if you’re new to it, but if you tackle it head on then it can make a world of difference. For more information take a look at www.moneyadviceservice.org.uk and check the latest savings deals at www.moneyfacts.co.uk
* As at 28th October 2011