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As the second wave of the COVID-19 pandemic takes hold it will be inevitable that people’s incomes will continue to fall and costs will continue to rise. This will be felt starkly in Scotland - despite the furlough scheme being extended until March next year many businesses remain closed.

As the country continues on a rollercoaster of lockdowns and restrictions, there are extensions to some of the Government support schemes but these will not be enough to save some jobs or keep others from the brink of insolvency.  Many of us will be facing more austerity than we have ever seen in our lifetime. This comes also at a time when we are all desperate for some joy in our lives and as the festive period approaches, this is normally when we come together and enjoy a few days away from our every-day worries. After the year we have all had, there may be a temptation to treat ourselves when we really cannot afford it, by overspending and maxing out the credit cards.

This Christmas will be different to the ones we have known in the past, and yet a Christmas of overspending could add to an already heavy financial burden.

With these factors in mind, what can you do now to minimise the financial impact that will inevitably be felt when the credit card bills arrive in January?

Here are a few tips:

Christmas shopping

The Government has already encouraged us to start our Christmas shopping early to ensure shops can maintain social distancing regulations and do not get overwhelmed. Each year it feels retailers start the countdown earlier and earlier and we are drawn in to the commercialism of it all. Stop and think about whom you really need to buy for this year. Make a list and then set a budget and stick to it. As households will, in all likelihood, be restricted from mixing with each other, there will be no opportunity to swap presents. Do you really need to organise them for delivery before Christmas day? Can some Christmas shopping be delayed until the New Year when restrictions might be eased and you can give your gift in person? This will help spread the cost of Christmas.

Festive Food shopping

Every year, there are reports of huge amounts of food waste because of over spending and buying too much food for the festive period. This is the year to think about buying only what you need for your household. This will not only be kind to your purse but also to the planet. Remember if you have a freezer, many food items can be purchased in advance and frozen to spread the cost. Allocate a festive food budget and stick to it.

Remember it is the season of goodwill

We have all had a year of unprecedented challenges. This has led to both physical and mental health issues. Is it necessary to buy lots of potentially unwanted gifts when what is more precious now more than ever, is keeping in touch with family and friends? It might not be possible to see loved ones in person this year but a phone or video call will do much for the soul to bring some festive cheer, particularly for those shielding, self-isolating or living alone. If you are struggling financially, is it worth getting into more debt at this time? It could take the average person up to five months to pay off Christmas debt. Whilst a ‘digital Christmas’ may not sound appealing, connecting with people we love, really helps mental well-being and is not draining on the wallet.

Household bills

We are all spending more time at home, which means especially during the winter months our bills are going to be even higher than normal at this time of year. As many mortgage and credit card payment holidays have ended, you will need to make sure you have funds to cover these costs once again. Make sure you budget and set money aside for the mortgage or rent, council tax, gas and electricity. Also, do not forget to put money away in a ‘snowy day’ fund to cover unforeseen emergencies such as a broken boiler or a burst water pipe.

Do not be tempted to access instant borrowing

Unless you can afford to pay it back, accessing instant credit and maxing out your credit card is not a good idea, especially at this time of year and can leave you struggling to make ends meet at the best of times. Ensure if you do decide to do so, that you check carefully the lender’s terms and conditions to make sure the repayments will be manageable in the future. Remember always read the small print.

Beware of Scams

The nation has pulled together in a way probably not seen since World War 2. Sadly though, there will always be unscrupulous fraudsters out there, always ready to take advantage of the situation and happy to prey on the vulnerable. Stay vigilant and stay aware of the risks involved with digital banking. Never give out your bank details to an unknown caller especially one claiming to be your bank. Do not allow remote access to your computer. Scammers are always trying new ways to get control of your data so they can steal your cash.

Get debt advice as soon as possible

Included in the Coronavirus (Scotland) Act 2020 is an extension of the breathing space allowed to those in debt from 6 weeks to 6 months. This moratorium prevents creditors from exercising legal recovery rights while a process is put in place to provide debt relief, whether it be by way of the Debt Arrangement Scheme, a Protected Trust Deed or Sequestration.

A recent initiative, which may help you through the pandemic, is a COVID-19 Payment Plan (“CVPP”). Step Change, the debt charity, has introduced this. It provides an alternative to formal insolvency. The way it works is by allowing you to make reduced payments to your regular financial commitments for a period of up to 12 months whilst you are affected financially by the pandemic, because for example, your income has reduced. You will need to fulfil certain criteria and entering a CVPP may affect your credit rating but it maybe something to explore to give some breath space through the pandemic. More information can be found here:

Such steps may not be necessary though – you may simply need some advice on making the most of your money, or assistance with budgeting. Now more than ever it is essential to take early advice to protect yourself and your family and to make the right decisions based on sound professional advice.


Contact us

If you would like to discuss any financial issues you are having on a purely confidential no cost basis, contact us for an initial chat call with Caroline Reynolds on 0800 652 0002. Or you can complete a contact form here.

You may also find these separate blogs and web links useful as well: