At the start of every year many people are hit with the sudden realisation that they have accrued a huge amount of debt over the festive season, and many go into panic mode because they have no idea how they are going to repay the money. Some even end up spending the rest of the year paying it off, or even add to the debt the following year because they still haven’t cleared what they accrued from the previous Christmas.

Whilst Christmas is still several months away it is important for those that want to avoid huge amounts of debt once the festive season is over to do some forward thinking about the amount that they are going to spend and how they are going to fund their purchases.

It is vital to ensure that you set a realistic budget for Christmas in the same way as you might if you were going on holiday. Making a list of all of the gifts you need to buy and making a note of the maximum amount you can afford to spend on each person is an effective way to stay within budget as long as you stick to this. It is also advisable to set a budget with regards to how much you can afford to spend on going out and entertainment, and ensure that you stick to this.

Another useful way to cut the cost of Christmas is to think about gifts that you may have received over the course of the year or last year from others, which may be lying around the house gathering dust. If they are still in their packaging and look like new then there is no reason why you shouldn’t re-gift them to others this Christmas. That way you get to de-clutter the house, you save the money of buying a gift for that person, but the person still gets a gift.

Many retailers start selling Christmas gifts and products around this time, and in order to generate interest often sell them at half price or less to start with. This is a good time to start buying your gifts, and try and buy one or two a week or a month until Christmas. This will help you to save money and will ensure that you are not caught up in the last minute rush, which is when things are also often at their most expensive.