The Financial Strain of Christmas
It’s that festive time of year again and with just over a week to go until Christmas day, people are starting to feel the financial burden of it unfolding. While most people enjoy buying gifts for family and friends, it can be very expensive, especially if they have young children. They don’t want to see their little ones disappointed faces on Christmas Day when they don’t get the Santa present they have asked for. So people use credit cards and take out loans from credit unions, and some even approach moneylenders to help to provide their loved ones with the gifts they want. The Irish League of Credit Unions surveyed 1,000 people and the results showed that most people spend over €560 at Christmas. They will need to borrow almost €390 for this. After the holiday’s men’s bank balances seem to return to normal faster than women’s, (at seven and a half weeks for men and nine weeks for women.) Nearly 10% of people approach moneylenders and 4 % of people have regarded borrowing from them at some point.
Ed Farrell of the Irish League of Credit Unions said ‘Using a moneylender can result in consumers getting trapped in a cycle of debt which can be hugely difficult to break free of.’Personal finance expert Frank Conway said ‘In many cases the compounding impact of the interest is over 100% of the original loans amount so that smart phone you are buying is not €300, it’s €600’. ‘While a credit card will charge 18%, a moneylender will charge 118%.’ ‘In the old days the moneylenders got heavy physically, today it affects your credit score’. ‘The one thing I would say about credit unions is that they are not for profit, you have a far cheaper cost of borrowing and you can get in to a savings habit earlier on’. Jim Walsh from the St Vincent de Paul said that many people need financial assistance from them after Christmas because of borrowing from moneylenders. He said Christmas is one of the busiest times of year for the St Vincent de Paul. They could have over 65,000 phone calls a day from just the eastern region and volunteers visit about 140,000 houses over Christmas.
Local single mother from Dublin 8
‘Christmas is very expensive for me.’ ‘I have a 16 year old daughter and she loves make up, hair straighteners and smart phones.’ ‘I don’t get the single parents allowance anymore because she is 16.’ I probably will spend about €500 on her Christmas presents. I will have to take out a loan from the credit union to help me with this. My family and I don’t exchange presents anymore as it has just got too expensive. ‘‘We just give the grandkids something small.’
Remember Christmas is really only for one day. People get carried away with spending extortionate amounts of money on their family and friends. Although everyone likes receiving presents (myself included) being kind to your loved ones, and spending quality time with them is the most important aspect of Christmas.
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