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Managing Christmas While In A Protected Trust Deed

15th November 2012

This is the time of year when the media seems to be full of “sticking to a budget at Christmas” articles and programs. Anyone that is part-way through a protected trust deed will already be well-used to budgeting, but Christmas can add a lot of extra pressure. In this article we review some ideas about how to best manage Christmas this year and in subsequent years.

It may be a little late for this year, but saving for Christmas is allowed during Scottish trust deeds. Saving even a small amount each month (by cutting back slightly on one or more of your allowances) will allow a decent sum to build up over a year. This could be sufficient to relieve part of the financial pressure. Credit unions might be a useful facility to build up some Christmas savings in the future.

Traditionally many people used Christmas savings schemes but these fell from grace with the demise of Farepak six years ago. £37 million of consumer savings was lost. From next year the consumer-owned Co-operative Group will launch a Christmas savings scheme in which all savings will be placed into a separate trust. This trust is ring-fenced away from the main business so insolvency for Co-op would not result in the loss of the savings.

What if you haven’t saved anything for Christmas this year? The first thing to avoid (at all costs) is the scourge of payday loans no matter how tempting they seem. The Independent has a front-page headline today exposing a number of dodgy payday lender Christmas promotions. These include statements like:

  1. “Join in the holiday festivities without a second thought to the cash in your bank account”. APR = 4,248%.

  2. “Handy cash help at cheap and friendly interest rates”. APR = 1,940%.

  3. Use the cash for anything “such as buying clothes and even a party”. APR = 2,670%.

Using payday loans will simply replace one immediate problem with a much larger problem in the New Year (thanks to the high interest costs). It isn’t worth jeopardising your family budget, your trust deed, or even your home, for a couple of hundred pounds extra at Christmas.

So how about managing Christmas this year? Each year threads appear in our forum on this subject. They’re full of good practical ideas that people have had to make their budgets stretch as far as possible over the Christmas period. If you’re worried about how you’ll manage you may wish to register for our protected trust deed forum and request some ideas and support from your fellow site members.

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