Seasonal spending & financial wellbeing

Most of us probably end up spending far more over Christmas than we ever intend to, especially with the increasing popularity and temptation of Black Friday and cyber Monday. Our good intentions of getting better organised and budgeting for next year always seem to get lost somehow.

Simply maxing out the credit card with Christmas gifts and goodies without a clear plan of how to pay it off can get be a real problem, leading to stress, anxiety and ultimately lost work days.

One of the best ways to avoid debt is to budget – yet a large proportion of us don’t – maybe because we never get around to it or simply don’t know where to start.

It is thought that more than a quarter of adults in the UK will start the new year struggling with money, a large part of this is due to Christmas spending.

A survey carried out by the Money Advice in January 2016 showed 20% of people funded Christmas using a credit card, 6% used their overdraft, 2% borrowed money from family and a further 2% resorted to a Payday Loan company. Part of the reason for this is people feel pressure to spend more than they can afford with 1 in 3 overspending as a result.

The danger of using credit cards and other forms of finance to pay for Christmas or any other spending isn’t just the extra costs incurred via interest and charges, but the very real chance that these could spiral into debt problems.

Money skills are now part of the national curriculum although the Money Advice Service suggests that only 40% of children between the age of 7 to 17 are taught these vital skills.

Of course, parents share the responsibility for their children’s education, but only 3 out of every 5 parents feel confident in talking to their children about money, so what can we do?

Supporting your employees

There are many reasons people find themselves in debt besides overspending – unemployment, a growing family and unexpected bills for example. But whatever the cause, debt can have a real impact on a person’s life, health and performance at work.

Employers can really help to educate their workforce by providing them with information and support should they need it.

Providing a financial education library as part of your benefits package is a great place to start. A good benefit provider should be able to provide this for you on your benefits platform.

A good Employee Assistance Programme (EAP) is money well spent and will include advice on debt management, giving them expert independent information.

Schemes that help employees manage their debts are a really valuable tool such as debt consolidation loans that are salary deducted can help to cut down the cost of credit and reduce debts faster.

Helping employees to plan ahead and start saving for their future is a good way to encourage positive habits. A company pension goes some way towards this, but additional options such as workplace ISAs are also worth considering.

Introducing a Christmas club scheme where employees can opt in to having part of their regular pay into saved for them and paid back in time for them use it for their Christmas shopping, is another good way of encouraging the saving habit.

Providing a well-rounded financial wellbeing scheme as part of your employee benefits package will really help to make a difference.