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Christmas is coming and the credit crunch is biting; a combination which has left many people planning more frugal festivities this year.

In fact, according to a survey by Norwich and Peterborough Building Society (N&P), over half of respondents claimed that a ‘careful’ Christmas is in the offing. Penny-wise activities include reducing gift budgets, purchasing less food and drink, and even producing home-made gifts.

57 percent of those surveyed revealed that they were intending to spend less this Christmas and of those, 68 percent planned to buy cheaper or fewer presents. 48 percent said that they would buy less food or sacrifice meals out so as to save money, and 16 percent planned to miss out on parties in an attempt to make savings. 10 percent claimed to be planning for fewer, or no, decorations this year in an effort to cut back.

Of those respondents who believed that their spending would remain unchanged this Christmas, 58 percent said that this was possible because they had spent the year saving up for the occasion. 17 percent had done so from the summertime onwards, 19 percent commenced saving three months in advance, and 6 percent put money aside one month prior to the Christmas period.

The respondents who had not actively saved up for Christmas revealed three main methods of payment: 22 percent intended to use their credit card; 13 percent confessed that they would use their overdraft facility; and 47 percent said that they would turn to their existing savings.

In terms of spending values, 38 percent of those surveyed explained that a sum of up to £500 was probable, while 36 percent were anticipating costs in the region of £500 to £1,000. 17 percent were set to spend between £1,000 and £1,500, with 6 percent looking at an expense between £1,500 and £2,000. Finally, 3 percent expected to spend anything from £2,000 to £5,000.

N&P’s savings products manager Gary Lacey commented: “The results of the survey show us that putting money into a savings account on a regular basis seems the best way of making sure this Christmas will still be a merry one, despite the turbulence in the financial markets and the increased cost of food and utility bills.”

Those who have spent up on credit cards or store cards could consider consolidating all debt into one loan, which could make budgeting more straightforward next year. One of many finance options available, it is important to remember that consolidating debt may increase the amount paid back overall, and could extend the repayment period of debts.

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