Christmas spending will leave 38% in the red

CHRISTMAS costs will leave almost four in 10 people in the red this year and it will be seven months before some of them manage to clear the debt.

Despite the economic woes, the average adult expects to spend €562 on festive gifts and goodies, but many will not be able to meet the financial pressure without loans or credit cards.

That’s despite the belief of the majority of the population that we all spend too much at this time of year and are charged prices too high to make our purchases value for money.

The findings are from a survey by the Irish League of Credit Unions (ILCU), which is encouraging consumers not to let their spending get out of hand this festive season.

Its “Let Santa Be The Only One In The Red” campaign says worry about how to fund Christmas is intense after another financially tough year and the prospect of budget cuts, price rises and fuel cost increases ahead.

ILCU chief executive Kieron Brennan said: “We are warning people not to be tempted into using moneylenders, due to the extremely high rate of interest charged, and also to watch out for credit card debt, as a high rate of interest will be charged to balances that are not cleared on time every month.

“We want people to enjoy Christmas this year and keep in mind what really matters, and that is family and friends and not causing yourself unnecessary stress by getting into financial difficulty.”

About 38% of adults will get into debt because of Christmas and only 28% have savings put aside specifically for the festivities. Just over half (55%) intend using general savings and whatever cash they have on hand for the additional shopping bills but one in 10 will rely on credit cards. Parents expect to spend €164 per child.

One in three (34%) said it would take two or three months to recover from the splurge but one in eight (12%) said it would take at least four months, and a smaller percentage would not be able to clear the bills for this Christmas until next July.

The ILCU is encouraging people to start credit union savings accounts, to ensure that they are better prepared for next year’s festive spending.