Savings: Of sense and sensibility - Christmas spending

ENDA KENNY once declared that “we all went a bit mad with borrowing” during the Celtic Tiger years.

He was speaking in January, 2012 on Ireland’s economic crisis at the World Economic Forum in Switzerland and was subjected to a variety of broadsides from opposition politicians for his remarks.

Perhaps the Taoiseach now might be inclined to say “we all went a bit sane with borrowing” in the aftermath of the recession as a new study shows that our appetite for overspending has waned considerably in recent years.

The annual Christmas spending survey conducted by the Irish League of Credit Unions is a good barometer of our sense and sensibilities.

This year’s survey reveals that, while a growing number of people feel more financially secure these days, most choose to exercise restraint and are not prepared to risk getting into serious debt to enjoy Christmas.

In the region of 44% will have sufficient money in their monthly income to pay for Christmas this year. This is an increase from 36% in 2014.

Nevertheless, the study also shows that 45% of consumers are likely to borrow to cover costs at Christmas, although this is down from 51% in 2014.

The average amount to be borrowed this year is estimated at 388, down from 417 in 2014. Our overall seasonal spending is also down — from 600 in 2014 to 563 this Christmas, on average.

Allied to this is the strong belief (79% up from 71% in 2014) that Irish people spend too much money during the festive season.

This new-found frugality tallies with a survey last month conducted by the Competition and Consumer Protection Commission which revealed that just 9% of adults took out a personal loan over the last year and, of those who did, 60% obtained theirs from a credit union rather than a bank.

That’s the good news. The bad news is that there are still a considerable number of financially strained people in Ireland who are prepared to borrow from a moneylender to finance their Christmas spending. In doing so, they risk getting trapped in an endless cycle of debt.

As well as that, the number of people going online to make their Christmas purchases is growing which means that local businesses and retailers that do not have their own website or an online presence will invariably suffer.

As the ILCU advises, we should all be making lists — and checking them twice — to ensure that spending is kept under control.

There is one thing we can spend with abandon and that is time with family. It costs little or nothing and, like the best things in life, is priceless.

A debt-free Christmas is, perhaps, the best present of all that we can give ourselves.

‘Happy Austerity!’ doesn’t have much have a ring to it but it might just make the New Year more joyful for all.