Christmas to put half of people in debt

THE cost of Christmas will drive more than half of us into debt this year and one-in-four will see financial woes dilute our enjoyment of the festivities, a new survey has found.

What’s more, almost a third of us will resort to borrowing on credit cards to cover the cost and then face an uphill struggle to get back on track — it will take a quarter of us three to six months to recover financially from the festive outlay.

The survey, carried out by IREACH Market Research on behalf of the Irish League of Credit Unions (ILCU), shows the temptation is to borrow beyond our means from sources that charge very high interest, building up future debt.

ILCU is advising members of its 500 affiliated credit unions to approach their credit union for advice about Christmas spending.

“Over Christmas many of us feel unnecessary financial pressure and there is a temptation to borrow and spend beyond our means, leaving a very bleak outlook for some as they face into the new year,” said ILCU president Mark Bailey.

“We wanted to let people know that Christmas need not mean unnecessary stress and debt and we want to remind consumers to talk to their friends and families and that credit union doors remain open to those who need advice about their finances at any time of the year.”

ILCU chief executive Kieron Brennan said 2010 had been a watershed year in terms of coping with job losses, pay cuts and increased taxes and people should remember, when planning spending, that there were still tough financial challenges ahead.

The survey, carried out in November, also found:

* Just one-in-five save specifically for Christmas — one-in-four females and just 15% of males.

* Men are less likely to experience a shortfall in spending because they manage their finances better.

* Seven-in-10 spend most of their money on Christmas presents, followed by food.

* Females spend more on presents and males tend to spend more on food and drink.

* More than half of us will spend more than €500 on Christmas this year, with 31% spending €750. Males tend to spend more on Christmas than females, with 38% spending more than €750.

* Almost half (48%) will use general savings or cash to pay for Christmas celebrations this year.

* Females are more likely to have taken out a credit union loan for Christmas.

Not surprising, those who took part in the survey reckoned spending less on Christmas presents and nights out was key to saving money. More than two thirds said they would have to make sacrifices in order to have a better Christmas this year. More than 1,000 adults took part in the survey between November 18 and 23.