Money for beginners: The 12 savings of Christmas

IT’S only October, but the Christmas store displays are already out in force. So let me start with a stark and urgent warning. Christmas is coming.

This year it will be on December 25.

This may be stating the blooming obvious but, so many complain in January that they’ve overspent at this retail festival, the only assumption can be that it came as a shock. So here are my 12 saving of Christmas:

1 Get up to five per cent off everything

TO encourage you to spend on them, cashback credit cards pay you each time you use them, in the hope you’ll rack up great swathes of interest. But if you set up a direct debit to repay in full each month, and you’re not charged a penny.

Currently the top card’s the American Express Platinum, which gives five per cent cashback for the first three months. Apply now, and it’ll be in time for the crucial Christmas and January sales period. You need £30,000 family income to get it though; for alternatives see moneysavingexpert.

com/cashbackCC

2 Ask the right question

MOST people wrongly decide what they want for a perfect Christmas then ask “What’s the cheapest way?”

yet actually you need to be guided by your finances, so instead first ask, “What can I afford to spend?”, then work out what the best possible Christmas is with that amount of cash and stick to it. It’s better to have a financially fit New Year, than a tiny bit better Christmas. There’s a free budget planner at moneysavingexpert.com/budgeting

3 Don’t use Tesco vouchers for Christmas food

LOTS of people store up Tesco Clubcard vouchers for Christmas treats, yet this is a massive waste. You get four times the value, ie, £5 becomes £20, if you redeem them on things in the Tesco Clubcard Rewards brochure tesco.com/clubcard/deals.

Rewards include days out, gifts, jewellery, magazine subscriptions and more, so it’s great for gifts at a quarter of the price.

4 Agree a No Unnecessary Presents pact

IN this year of recession, why not agree a pact with friends or colleagues, to just send a card, or give gifts under a certain value? If you’re embarrassed to ask there’s a special tool to do it for you at moneysavingexpert.com/nupp

5 Find the cheapest prices in seconds

IF you do buy gifts, don’t do it on impulse.

Create a list then search for the cheapest prices using a shopbot (shopping robot). This is a price comparison website, like twenga.co.uk or foundem.co.uk, which searches scores of internet retailers to find the cheapest, whether for books, games, CDs, DVDs, electrical goods or more. Or try megashopbot.com which combines different shopbot results.

6 Spread the cost without a special credit card

ONE big mistake people make is to try and pay for this massive event out of December’s income. If it’s unaffordable, you end up borrowing cash, and start off the New Year in hock. So if you’ve not started saving, there’s still time now to put away money for October, November and December.

It is also possible to spread the cost into January interest-free, even without a special 0 per cent credit card, by spending on an empty card in December, and ensuring you repay it in full in January.

7 Use discount vouchers rather than pay full price

IN the run-up to Christmas, shops are desperate to attract new customers, with discounts and deals, but don’t want to give reductions to their walk in trade who’d be shopping there anyway.

To do this they use special click ‘n’ print web vouchers for those prepared to look. As we near Christmas there are loads around; a daily updated list of all the hot legitimate ones is at moneysavingexpert.com/discountvouchers and a wider range at myvouchercodes.co.uk

8 Grab store card discounts at no cost

PRE-Christmas high street retailers try to bribe us with huge introductory shopping discounts if we sign up for their store cards. The problem is the disgusting 25 to 30 per cent interest rate. Thus never, ever, ever borrow on store cards. Instead, the disciplined can spend on them to bag the discount, and immediately repay in full, so there’s no interest charge.

Better still, team up with friends, so one gets a card, you all spend on it for the discount, and they give you the money. Then next time you shop, someone else gets the card and you use the same trick to perpetually keep the discount.

9 Get expensive perfume on the cheap

FORGET big department stores for perfume. A whole bunch of specialist online sellers flog it for a fraction of the price. Better still, buy the even cheaper unboxed bottles, then get a pretty box and wrapping for a couple of quid. This way, they think you went to extra effort but actually you saved extra cash. A full breakdown is on moneysavingexpert.com/perfume

10 Use a Money Mantra before you spend

FINANCIAL discipline’s important with temptations all around, so before you buy anything use the relevant one of my two money mantras ... remember these questions:

IF YOU’RE SKINT

Do I need it?

Can I afford it?

Have I checked if I can find it cheaper anywhere else?

IF YOU’RE NOT SKINT

Will I use it?

Is it worth it?

Have I checked if I can find it cheaper anywhere else?

If the answer is no, don’t buy it!

11 Knock £100s of your Christmas food and drink shop

USE mysupermarket.co.uk to compare the cost of your big Christmas shop at Tesco, Sainsbury’s, Ocado (Waitrose) and Asda online. Even if you don’t want to actually buy online, it’s a good indication of which store is generally cheapest.

Also try my downshift challenge to drop down a supermarket brand level this Christmas, eg, from finest to normal, normal to own brand, or own brand to value brand. For a TV programme, I once organised two identical Christmas parties for 20 maternity nurses. For one the tree, drinks and food were a higher level brand; the other, one brand level lower. When they voted on the best, they actually preferred the cheap one.

12 Delay Christmas, bah humbug...

IF you’re buying a big purchase for you and the family, like a hi-tech TV or Playstation, it’s likely to be vastly cheaper after Christmas as retailers can’t hold us hostage. So why not give the kids a nicely wrapped IOU for the January sales, and a small present saying you could afford extra because of that? Then the kids get more and, even better, the gift of a good financial lesson on top.

Two free audiobooks

AUDIOBOOK provider audible.co.uk is offering a 14-day free trial. It’s possible to grab any two audiobooks completely free (including the new Dan Brown best seller The Lost Symbol).

Just go to audible.co.uk/freetrial and sign up for the £14.99 premium package.

Then before the 14 days are up, call 0800-082-5100 to cancel.

■ TV money guru Martin Lewis runs the consumer revenge website MoneySavingExpert.com; ensure you get his weekly email so you’re constantly saving money.