Monday, 12 December 2011

Let Santa be the only one in the red this Christmas

As the big day looms, many families are deep in preparations for the Christmas holidays and though it is a time of joy, it puts a lot of pressure on hard pressed parents trying to give their families a holiday to remember.

We must remember that 2011 has been an incredibly difficult year for the Irish public. Families disposable income has been shrinking and there has been an increase in the number of people making do with just a very small amount of money once essential items such as mortgage, rent, groceries and utility bills are paid. Many of Ireland’s energy suppliers will also pass on increased energy costs to the public this winter and Irish people are very worried about the impact these costs will have on their already stretched incomes.

In late November the ILCU launched their annual Christmas campaign – “Let Santa be the only one in the red this Christmas”. The campaign urges people to avoid borrowing beyond their means to avoid a sack full of debt in the New Year

The ILCU Christmas spending survey shows that in 2011 approximately 38% will get into debt this Christmas. 41% of females compared to 34% of males are worried about over spending at Christmas. 77% do not feel any better about their financial situation than they did last Christmas.

55% of respondents say they will use general savings or cash to pay for Christmas, with 28% using Christmas specific savings. 9% will use their credit card with smaller numbers availing of credit union loans and money lenders. Credit union members are more likely to use Christmas specific savings than non members (32% versus 21%)

In terms of recovering from over spending at Christmas, 34% stated that it will take 2-3 months to recover. 12% are taking 4 months or more and a small proportion of respondents say it will take over 7 months to recover financially from Christmas 2011. The survey shows that women are taking longer than men to recover from Christmas debt.

62% of respondents feel that there is not good value on the high-street - this varies by region, with 39% in Dublin, 55% in Leinster (outside Dublin), 67% in Munster and 67% in Ulster / Connacht. Overall 70% believe that Irish people spend too much on Christmas.

We are also highlighting the dangers of using moneylenders, due to the extremely high rate of interest charged and also to watch out for credit card debt, as a high rate of interest will be charged to balances that are not cleared on time every month. We urge people to plan ahead and avoid this situation in the future and go to their credit union and start a Christmas savings account for next year. This way you can put a little bit away every month and not have to worry about sourcing additional money at Christmas 2012.”

As we approach Christmas, our survey shows that the greatest enjoyment for Irish people is spending time with family at Christmas. We want people to enjoy Christmas this year and keep in mind what really matters and that is family and friends and not causing yourself unnecessary stress by getting into financial difficulty.

From everyone at the Irish League of Credit Unions and our affiliated credit unions, we want to wish you all a very happy and peaceful Christmas and very best wishes for 2012.