FOOL'S EYE VIEW
Seven Ways To Save For Christmas

By Alison Hunt (TMFAlly)
October 11, 2005

Anyone who's recently taken a trip to his or her local supermarket will be bound to have noticed a certain scary aisle that's reared its ugly head again. Yes, you've guessed it - the Christmas aisle is back. Aargh!

Packed to ridiculous heights with monstrous tins of sweets and chocolates, the Christmas aisle is there to taunt you with the fact that although Christmas still seems like a long way off, it will, as always, creep up on you at breakneck speed and take all of your money with it!

Of course, the organised will already have started their Christmas shopping, taking full advantage of the numerous sales that retailers have held. However, for the rest of us, Christmas usually means rushing around at the last minute, spending money that we simply don't have. As a result, come January many of us will find ourselves looking at huge credit card bills in disbelief and wondering why we never plan for these expenses even when we know they happen every year.

But this year can be different! We still have over two months until Christmas; plenty of time for some serious cost cutting and saving plans to be put in place. So why not follow these tips and aim to squirrel away a healthy sum to help out with the cost of the festive season and look forward to a debt-free New Year?

Get free money from your bank

Now this is an easy one that can earn you quick money. How about a free cash handout from your bank? Although this sounds improbable, many of the internet banks are battling for our business and putting their money where their mouths are, offering cash incentives to those who move their accounts. What's more, they also offer interest rates that can be up to 50 times higher than those offered by the High Street banks, and competitive overdrafts, too.

Apply online to Citibank and you'll get a whopping £75 for your trouble while First Direct and Lloyds TSB will pay you £50. And if you know someone with an Alliance & Leicester Premier Direct account, get them to recommend you and you could both earn £50. Plus you'll earn 5%AER on your cash. You'll usually need to make sure your salary is paid into your new account. So if you're not particularly enamoured with your bank, consider switching and claim some free cash!

You can apply for the First Direct and Alliance and Leicester accounts, plus many more in our Banking Centre.

Switch Gas and Electricity Supplier

You'll be hard pressed to find anyone in the UK who has not suffered at the hands of the energy companies this year. Prices have risen sharply resulting in most of us feeling the sting of at least one increase this year and things aren't set to improve. One way to save is to switch energy suppliers but there are still many people who have never switched supplier. If you're one of them, check out one of the many comparison websites to find out how much you can save by switching supplier.

Fool partner uSwitch, for example, believes that around £170 could be saved, per year, simply by choosing more competitive suppliers. And although it may be worth waiting for a week or two before switching to allow the comparison tools to obtain any new prices from companies who haven't announced their changes yet, it will be well worth doing.

Switch energy suppliers in our Get Out Of Debt Centre.

Supermarket offers

If, like most people, you do the majority of your shopping in a supermarket, it could be well worth signing up for its loyalty card. Although this does mean its marketing people can keep tabs on your shopping habits, it also means you can benefit from the numerous money-off vouchers they post out. If you sign up for a few, you may even find the supermarket you're less loyal to will try to woo you with better discounts. And all of those pounds off will help out with the cost of festivities if you'd be shopping there anyway. Many loyalty schemes also have special clubs you can sign up to, too, according your interests (such as Wine, Food, Healthy living and Baby and Toddler) meaning you'll get more vouchers aimed at these interests. Plus, you'll also be collecting points each time you shop, which can be used for various rewards or even presents.

Spend less on food

And while you're thinking about shopping, a fortune can be saved, simply by buying only the items you need. We in the UK are guilty of throwing away vast quantities of food each week, which is not only wasteful, it's money in the bin! Why not consider coming up with a menu each week and making sure you have what you'll need for it? Cooking fresh food is much cheaper (and healthier) than buying ready meals and if you cook more than you need, the rest can be frozen for a quick dinner another night. And by cutting out those take-aways for a few weeks you can save a bomb two family take-aways at £20 a pop will immediately save you £40 each week. Keep that up for the next ten weeks and hey presto, £400 in the kitty!

Cancel any memberships you don't use

Hands up if your bank statement shows a direct debit for membership to a gym that you haven't seen the inside of for weeks on end! Although you may have joined with the best of intentions, you, like thousands of others are literally throwing your money away each month, and with monthly fees ranging from £35 to £85 (or more), this is a lot of cash being wasted! Why not cancel that membership and try walking or cycling at least part of the way to work instead? Not only could it be easier to stick to, you'll be getting fitter for free, too. And the same goes for any other subscriptions you don't use, such as satellite TV, magazines etc. Remember, two months' gym fees at £50 per month and satellite TV fees at £40 means you could have an extra £180 for Christmas!

Spend less on everything else

If, like me, you spend a fortune on books and get through far too many of them for your bank account's liking, why not consider joining your local library? Alternatively, you could set up a book-swapping club at work or with friends, which could effectively mean you can read four or five for the price of one! If you do need to spend money make sure you're getting the best deal possible, and that often means buying online. By all means check out the product that you're interested in when out shopping, but once you've decided on the model you want, plug its number into a price comparison website such as Kelkoo or Pricerunner to find out the cheapest place to buy it from. Savings to be made can range from a few pounds to a few hundred so it's well worth checking out. Don't forget to find out how long it will take and how much it will cost to ship for a fair comparison. And you can often save the most money of all by buying from sites such as eBay.

Get more from your Credit Card

0% Balance Transfer Cards

If you currently have a balance on your credit card, you can save money by not paying any interest on it. By switching to a 0% card, you can effectively give yourself an interest-free loan, as many cards are offering up to one year, interest-free for balance transfers. However, watch out for balance transfer fees generally, the lower the balance to be transferred, the more important it is to find a card with no fee.

0% for New Purchases Cards

If, however, you have no credit card debt, why not make some money from your spending? By choosing a 0% card for new purchases, you can benefit from up to twelve months, interest-free on your spending. As long as you make sure you set up a direct debit to pay off the minimum amount each month, you could save the bulk of the cash spent into a high interest, savings account. This way you could gain the interest earned by this money over the 0% period. However, you must make sure you set the money aside each month as you'll need to pay off that balance in good time before the deal expires - or you'll be stung for a hefty interest charge!

Cashback Credit Cards

And finally, another way for sensible card users to benefit is to use a cashback card. Many cards offer a percentage of your spending back as cash, which can range from 0.01% to 2 and it's surprising how quickly this small amount of cash can add up over a year. Although this won't be available to help out this Christmas, you could have a healthy cheque to look forward to just in time for next year's festivities. But remember, do not consider a cashback card if you are not disciplined enough to pay off the balance in full each month as any money earned would be completely negated by interest charged!

You can find a number of 0% and cashback credit cards in our Credit Card Centre.

Of course, you should also ensure that you have a savings account paying a decent rate of interest to squirrel your hard saved cash into. So there you have it, just a few ways to cut costs and save some money for Christmas, and hopefully look forward to a debt-free New Year!