18:42 06 November 2012
Presents and party outfits are already in the shops, and it seems virtually impossible to avoid the countdown to the next big event in the calendar.
But if the very idea of Christmas fills you with dread because of the havoc it is sure to wreak on your finances, then now is the time to take control.
Here, we take a look at five ways you can make sure you're prepared as we hurtle towards the most expensive time of the year.
1. Clean out your direct debits
If you haven't scrutinised your bank balance in a while, you could literally be throwing away your hard-earned money each month. Remember that gym membership you used to have or that magazine you subscribed to but never read?
Unless you have contacted your bank and cancelled the direct debit, chances are it is still coming out of your account. Without regularly checking, these payments just become so absorbed into your financial landscape that you don't even remember that you're paying them.
In fact, recent research by MoneySupermarket reveals that, while 91% of current account holders use direct debit to pay for bills, goods and other services, over one in three (38%) didn't know exactly how much money was leaving their account every month.
And6% (2.68million) noticed a direct debit that they had forgotten about. This was highest among 18-34 year olds where more than one in 10 (11%) had a forgotten payment.
So, it's really important to keep on top of your direct debits and to regularly check your statement.
Kevin Mountford, head of banking at MoneySupermarket said: "Every penny counts right now, especially as we're heading into a costly festive season and many people may be looking for ways to get a cash boost in time for Christmas.
"Checking all outgoings and making sure you are not paying for products or services you no longer use is an easy step to do just that. You should have a clear idea of what is coming in and going out of your account each month - spend five minutes looking at statements and identifying any mysterious payments you don't recognise."
2. Start tackling debt NOW!
It's easy to bury your head in the sand where debt is concerned, but now is the time to get it under control so that you can approach Christmas with confidence.
There are plenty of tools out there to help you. For example, if you are finding it difficult to pay off debt because you are being hammered with interest, you could consider a balance transfer card with a 0% interest period.
This will stop your debt in its tracks before it can spiral anymore and give you breathing space to pay off your balance. Top of the tables currently is the Barclaycard Platinum Credit Card with Extended Balance Transfer.
This offers a mammoth 23-month interest-free period and its balance transfer fee was recently reduced to 2.8%. But make sure you do use this generous period to your advantage and pay off your balance - otherwise you'll be hit with a hefty representative APR of 17.9% (variable) once the 23 months ends.
The NatWest Platinum Extended Balance Transfer Credit Card and the Royal Bank of Scotland Platinum Extended Balance Transfer Credit Card are keeping up by also offering 23 months interest-free. However, their balance transfer fees are less competitive at 3.5%.
The cards also charge a representative APR of 17.9% (variable) once the 0% period ends.
Another debt which you might be struggling with is the black hole that swallows your salary every month - otherwise known as the overdraft. If this is the case, then now is the time to tackle it - wouldn't it be a nice present to yourself to see your full salary come 2013?
Your options are to either start to slowly reduce it in manageable stages, or, go cold turkey and cancel the whole thing, which you'll be able to do providing you're in credit.
It will mean a tough month - but just think of the rewards you will reap later down the line.
3. Shake up your current account
Our current accounts are something we don't often take much notice of. They just sit there, doing their job and we can end up quite indifferent about them.
However, your current account is a tool in the same way that a credit card or savings account is, and you should be making the most of your money by using one that is prepared to do some work for you.
For example, you could pocket a tidy £125 just by switching your current account to the First Direct 1st Account through MoneySupermarket. A great benefit of this account is that you won't be charged any interest on overdrafts up to £250 and First Direct is so confident you'll love the service that, if you want to change banks within 12 months, it will give you a further £100 for leaving!
If you're looking for an account that regularly gives you something back then you may wish to consider the Santander 123 Current Account. This pays you 1% cashback on water and council tax bills that come out of the account, 2% cashback on energy bills and 3% cashback on mobile, home phone, broadband and paid-for TV packages.
As if that wasn't enough, it also pays interest of 1% on credit balances of £1,000 or more, 2% on credit balances of £2,000 or more and 3% on £3,000 or more. But, if your balance falls below £1,000 on any day of the month, you will earn no interest on the balance for that day.
The great thing about switching current account is that it can be done with minimum fuss as most banks will offer a service to help you switch. And there are numerous accounts out there all offering various benefits, so check out MoneySupermarket's current account channel to find which account you could benefit from.
4. Spread your spending
If you think you are going to need a bit of extra help with funding Christmas, then one way to spread the cost without accumulating interest is to consider getting a purchase credit card with an interest-free period.
The market leading purchase card is currently the Tesco Clubcard Credit Card which offers 16 months interest-free. The card also rewards you for spending as it doubles up as a Clubcard and you can earn points on both Tesco and non-Tesco shopping.
Like all interest-free cards though, you'll need to keep an eye on when the 0% period ends because the representative APR rockets to 16.9% (variable).
M&S's credit card is slightly less competitive but still a strong contender. This comes with 15 months interest-free but the bonus is that the representative APR once the 0% period ends is slightly less than Tesco's at 15.9% (variable).
There are numerous purchase credit cards available, so shop around on MoneySupermarket's purchase credit card channel to find the best one for you.
5. Save any leftover cash in the best place
The idea of having any cash left over after Christmas is an unlikely scenario for many of us. But, why not get into the habit of saving now - even if it's just £5 every month - so you can start the new year with a good habit.
Not only will having savings give you more security if you were ever to need a cash injection, but it also means you can treat yourself to something you really want.
There are a number of savings accounts out there to choose from. Locking your money away for a set period will give you the best returns, but if you want to be able to access your cash then you could look at an account such as the ING Direct Savings Account. This would earn you interest of 2.50% and you only need £1 to open the account.
However, the rate comes with a 12-month bonus, which means that at the end of your first year holding the account, the interest would drop and you would need to move your money to a more competitive account.
If, however, you can afford to lock your money away, then you could consider opting for a fixed rate bond such as the Coventry Building Society Poppy Bond (11). This pays an impressive 3.25% interest for two years and interest is paid monthly. No withdrawals are allowed during the term though so you would have to be sure you wouldn't need access to your cash.
To browse a variety of savings accounts and find the best one for you, go to MoneySupermarket's savings channel.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct. We're free, independent and compare all UK credit cards, as well as offering exclusive deals you can't get anywhere else. Contact MoneySupermarket.com at Moneysupermarket House, St David's Park, Ewloe, Flintshire, CH5 3UZ. © Moneysupermarket.com Ltd 2012.
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