December Advice Column
This time of year is always so expensive, with presents to buy and heating bills going up. I’ve seen offers for ‘Buy Now Pay Later’ when I’m doing online shopping. It seems like a good way to spread the cost of some of the things I need to get for my family but how can I make sure I don’t get into debt?
With everything getting more expensive, this is a really difficult time for a lot of people, so it’s sensible to be thinking about how you can manage. There are lots of things you can do to try and stay in control of your money.
Before you start spending, work out exactly what money you have coming in and going out each month. Be realistic about what you need for essentials like food and travel. Take a look at the budgeting tool on the Citizens Advice website. This can help you set a budget you can stick to.
You’ll also be able to find tips on how to reduce your regular living costs, which might be helpful if you’re struggling to keep within your budget.
While it can be tempting to split payments with schemes like Buy Now Pay Later (BNPL), you’ll need a plan to pay the money back. If you’re using something like that repeatedly, you might be managing for now, but it could also be a sign that it’s unaffordable in the long run. Keep a record of how much you owe in total.
Always make sure you understand what you’re signing up for, how you’ll make the repayments and what will happen if you can’t pay on time. It’s important to check the returns process for both the retailer and credit provider. Paying through BNPL may also affect the cost of postage returns if you’ve ordered online. The riskiest thing about it is that you’re not guaranteed to be protected if something goes wrong. For example, you can’t go to the Financial Ombudsman Service if you have a complaint.
If you find yourself turning to credit cards, your overdraft, or store cards for your spending, keep track of what you owe. You should prioritise paying your rent or mortgage, plus energy bills and Council Tax first, because not paying these has the most serious consequences. On the Citizens Advice website, you can find information on what bills to prioritise and how to manage debts. There’s also information on the support available for paying these and other bills.
If, like many during this crisis, you find you can’t afford to reduce your debts after paying your priority bills and essentials, seek advice as soon as possible. If you need specific support or don’t feel able to manage your situation alone, call our debt helpline: 0800 240 4420.
Everyone’s circumstances are different, particularly when it comes to managing personal finances. Our advisers are here to help you find a way forward.