Why it pays to start saving now for Christmas and how you can do it

It makes sense to start planning and budgeting

Christmas may still be a couple of months away, but here's why you need to start saving now to prevent a ho-ho-hole in your finances.

The festive season may still seem like a long way away, but if you're worried about it making a dent in your finances, it makes sense to start planning and budgeting now.

We spent £452 on average last year on Christmas, according to research from Halifax. Standing at the top of the leaderboard of items we tend to splash out most on, are booze, gifts and the Christmas roast. Women are more likely to spend more than men; £482 on average versus £419.

Meanwhile, the independent Money Advice Service (MAS) has found that nearly one in three (30%) Brits feel pressured to spend more than they can afford to over the festive period.

So, to avoid a financial hangover in the new year, here are some tips from the MAS on what you can do now to ease the strain on your wallet:

:: Set a budget

Work out how much you can afford to spend in total over Christmas. Factor in everything, from food, gifts and decorations, to social events like the office Christmas party. MAS' Christmas money planner tool (www.moneyadviceservice.org.uk/en/tools/christmas-money-planner) can help you create your own budget and see how much you can save in time for Christmas Day.

:: Keep track of what you've got coming in and going out

Putting aside a bit of money each week between now and Christmas could soon add up by the time December comes around. If you want to avoid the temptation to dip into it, you could also ringfence it by putting it in an easy access savings account, rather than your day-to-day current account. Giles Martin, head of savings at Halifax, says: "To avoid a bill shock, it's worth starting to save now to spread the cost over several months." The MAS also suggests making a note of your spending, whether it's by keeping receipts or just making a note on your phone or in a notebook. This will mean you're more likely to stick to your budget. You can also simply take out a certain amount of cash each week or day, so you know how much you have to spend.

:: Make snips to your spending habits

Free up more money by thinking about whether there are any costs you can either reduce or cut out altogether. Halifax suggests ditching your regular takeaway coffee, for example, as small savings can soon add up. MAS has a Quick Cash Finder tool to help you work out where and how you could cut back on your regular spend (www.moneyadviceservice.org.uk/en/tools/quick-cash-finder).

:: Switch to own brand

See if you could save a few pounds by switching to your supermarket's own brand on regular purchases, such as cereal or ketchup, or by doing your food shop at a different supermarket altogether. Who knows, you might not even be able to tell the difference!

:: Have an early spring clearout

We may just be about to head into the winter months, but why not have a clearout now to make money for Christmas, and look into selling any old and unwanted items on websites such as eBay and Gumtree? It could even make more room for when family and friends pile round for Christmas.

THE EXPENSIVE MISTAKE THAT CAN LEAVE DRIVERS PAYING MORE THAN THEY NEED TO

Which type of car insurance would you assume was more expensive - comprehensive or third party cover? You might assume it's third party - as it offers a lower level of cover if you're involved in an accident. But many drivers may find this is not necessarily the case - as insurers may see people opting for third party cover as a higher risk.

Research from uSwitch.com has found nearly three-quarters (72%) of drivers mistakenly believe third party motor insurance is always cheaper than fully comprehensive cover - meaning thousands could be overpaying on their insurance policies.

Motorists could be overpaying for their car insurance by as much as £929 by only searching for third party policies, according to the price comparison and switching service.

It found a third (37%) of drivers who search for third party policies are potentially losing out because they do not search all policy types and may be paying higher premiums for less cover. The website says it has now set up a new search function which gives drivers the option to list all car insurance cover options when running a search.

Sabrina Webb, a car insurance expert at uSwitch.com, says: "Every year, drivers could be missing out on huge savings when they insure their cars, as three-quarters mistakenly believe that third party cover is always cheaper than a fully comprehensive policy."

POUNDNOTES

Financial fact: Some 4.1 million people have been defined in a report from the Financial Conduct Authority (FCA) into the UK's financial lives as being in difficulty - because they have already failed to pay domestic bills or meet credit commitments in three or more of the previous six months.

PENSION FREEDOMS BRING OPTIMISM FOR RETIREES

Nearly two thirds (64%) of people who retired since April 2015, when the pension freedoms were launched, say stopping work has opened up new opportunities, with one in five (20%) having decided to learn new skills and more than half (55%) devoting more time to their hobbies.

Those who retired since the pension freedoms, which give people more choice over how they use their pension cash, are being more adventurous with their holidays, according to the survey from LV=.

Nearly half (46%) are holidaying in places they have never been to before, compared to 39% of people who retired before the freedoms were introduced.

'DARKER NIGHTS CAN PROMPT BURGLARIES', HOME OWNERS WARNED

Claims relating to home thefts increase by over a third (36%) in the five months after the clocks go back, according to analysis by an insurer.

More than two-thirds (69%) of these break-ins are "forcible and violent entry" thefts, Co-op Insurance found.

Caroline Hunter, head of home insurance at the Co-op says: "Unfortunately, when the clocks go back, darker nights do lead to more burglaries and so we're urging people to be vigilant and think carefully about the safety of their properties."

2017 POPPY APPEAL TO ACCEPT CONTACTLESS CARD DONATIONS

This year's Poppy Appeal will give the British public the chance to donate via contactless card, alongside cash on a large scale.

The Royal British Legion, in partnership with card payment services provider Cardnet, is piloting the scheme with 200 mobile donation terminals across the UK.

The terminals, featuring the familiar Poppy design, will have three pre-set donation levels of £2, £3 and £5 enabling donors to quickly and securely make their donation for the traditional poppy or for a lapel pin.

Tony Nash, Lloyds Bank Cardnet MD, says: "We're really proud to be supporting the Legion and hope this pilot will lead to a hugely successful 2017 Appeal."

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