Overspent during the holidays?
You’ve still got a tan but the suitcases are unpacked, the kids back at school and you’re back to work – the summer holidays are well and truly over.
Unfortunately for many families this can also mean the realisation of the extra expense of days out, holidays and general overspending of the summer holidays kicks in.
The end of September probably means the credit card bills from the summer holidays are due bringing with them the harsh reality of the financial burden many families live with.
Recent research shows around 1 in 5 families have little to no savings to fall back on to pay the extra bills incurred by overspending during the summer holidays.
5 tips for dealing with holiday overspends
1. Prioritise your payments
It can be tempting to pay off the summer holidays costs as quickly as possible but homes, heating and comfort must take priority. Make sure you pay your rent/mortgage, council tax, gas and electric first before anything else. Keep these in order and the other things will fall into place a lot easier.
Advice on the StepChange debt charity website says “covering the minimum payment on all the debts you have is the key to avoiding default charges and a damaged credit rating. After that, pay most towards the highest-cost borrowing – that’s the debt on which you will have to pay most interest and charges.
2. Be strict with the credit card
After a heavy summer, it might be an idea to hide your credit cards in the bottom drawer for a while giving you a chance to catch up on the payments – be careful not to forget to increase the payments back up from the ‘minimum payment’ after a few months.
Debt advice blog ‘Debt Camel’ says people who only make the minimum payment can often be trapped for years paying off a credit card with interest charges eating up any payments that are made. Now might be a good time to see if you can transfer your credit card for a better deal or a 0% card if you are a new customer.
Set aside as much as you can afford above the minimum payments as this can take years off the amount of time it takes to clear the card.
The ‘Be Clever with Your Cash’ blog also advises using any savings to clear credit card debt to avoid paying the extra interest and then building your savings back up again.
3. Shop Around – don’t be afraid to make a change
It’s no secret that by shopping around for the things you pay for each month can have a big effect on your finances.
Switching your broadband provider, gas/electric, mortgage or even your bank account can save you hundreds per year which can then be put aside for savings or unexpected bills – or next year’s summer holidays.
There are also a number of ‘cashback websites’ that allow you to save each time you shop. Once you have signed up you simply submit a relevant receipt with a participating product and you can receive cashback into your bank account.
4. Plan Next Year’s Summer Holiday Now
The thing with summer holidays is that while they cost a lot to the average person, they do come round at the same time each year!
This might sound obvious. But it does allow you to start preparing/saving/paying for next year’s summer holiday now.
Draw up a realistic budget and stick to it – no matter what you are planning for, a weekly shop, Christmas, a new car or Holidays, this is the most important money-saving tip that all the experts repeat.
Visit the Money and Pensions Service website to use their online tool that will show you in black and white how much money you have coming in and out. This will also show you where other savings can be made.
A recent study by the Money and Pensions Service found that around 22% of UK adults have less than £100 in savings so recommend planning ahead to boost your savings for the most expensive times of year – Christmas and Summer.
5. If You Need Help – ASK!
The same research by the Money and Pensions Service also found that around 9 million people in the UK struggle with money.
Even though there are a number of charities that offer free help and advice only a fraction of people will actively seek help or advice.
Money and Pensions Service Chief Executive Caroline Siarkiewicz says “People should seek help early and not be embarrassed or ashamed. If you are ill, you go to the doctor, so you should get advice if your finances need it”.
Help and Advice from QuidMarket
For more information on the different charities/bodies that can offer help/advice/tips on money problems and saving, see our recent blog “Help and Advice”.