Will savings take a hit this Christmas?

Will savings take a hit this Christmas?

With the festive season just around the corner, many people in the UK may be wondering just how they are going to afford to pay for all the food, gifts and other expenses that Christmas brings. There are several options for consumers to consider.

Research carried out by Moneysupermarket.com indicated that dipping into savings and even using credit cards are among the options people are prepared to choose in order to cover their costs in the holiday period.

In fact, one in five of those surveyed stated that they plan to withdraw some cash from their savings account, which could mean that already-battered balances take a further hit as 2011 draws to a close.

However, the experts at the financial advice website were quick to point out that it's not too late to start putting money aside for Christmas and that even £20 per week could make a difference by the time December rolls around.

In addition, you need to sit down and work out a budget to control your spending; otherwise you may find that you have emptied your savings account or racked up a large balance on your credit card before you know it!

Calculate how much you can afford to spend on gifts, food and evenings out and see if there is anywhere you can make some reductions - either by foregoing a particular treat or choosing a lower-cost option.

Although your primary consideration might be funding this year's festivities, you should also begin to plan now to avoid ending up in a similar situation next year. This will give you plenty of time to research your options - including offshore savings accounts - and choose a product that offers a favourable rate of interest.

It seems that a small proportion of Britain's population have already adopted this approach, with 8.4 per cent of those questioned by Moneysupermarket.com revealing that they have been paying into a savings scheme all year.

There are many accounts on offer that allow you to build up your funds over time, so you should have no difficulty in finding one that suits you. What's more, if you have been able to save a sizable amount of money, you could discover that you are able to benefit from better returns by stashing it away in a fixed-rate offshore savings account.

Of course, it isn't just Christmas that costs money, celebrating New Year's Eve in style can also set you back.

Factor this into your calculations and if you tend to struggle with money management, why not put improving your financial planning at the top of your list of new year's resolutions?

According to research carried out by Defaqto, just 36 per cent of people seek assistance when choosing financial products; however, 49 per cent admit to struggling to understand some product features.

Nick Cann, chief executive officer at the Institute of Financial Planning (IFP), commented that "many Britons face an uncertain future because they're not taking control of their finances". He added that organisations such as IFP and Defaqto can "help consumers take simple steps to improve their financial fitness".

So, you need not despair if money management is not one of your strong points. Why not take control of your finances in time for Christmas and then aim to extend your savings regime well into 2012? You could be surprised by how much you are able to put away in an offshore savings account over the course of the year with just a bit of discipline.