Counting the cost of Christmas for families - VIDEO

LOAN SHARKS, credit cards or saving - how are you funding Christmas this year? It’s a huge expense for families across the county. Telegraph reporter Rachael Clegg discusses festive budgeting with a Sheffield mum and a debt expert

THE wrapped bundles under the Christmas tree epitomise what Christmas is all about - giving.

But while the feeling of handing over wonderful gifts to your loved ones is brilliant, it certainly doesn’t come cheap.

As the cost of living rises and wages remain stagnant, the financial pressure of Christmas is huge, especially for families with children.

Kerry Goding, from Handsworth, estimates she and her husband will spend around £1,100 on Christmas this year, including food and presents for her seven year-old son, entertaining, socialising, presents for family members and her and her husband’s presents for each other.

“It’s really difficult with parents now because children are bombarded with advertisements on TV for toys. And none of them are cheap - the box of Lego my little boy wants for Christmas is almost £130. And then he wants a JLS ticket, which is another £35 - that’s just a piece of paper! We looked at a list of the top ten toys and not one of them was under £30. A game for a DS is £30 and that’s just one little box.”

Kerry’s Christmas bill of £1,100 is over double the average for Yorkshire, which, research shows, is around £500 per family - the lowest in the country.

The biggest spenders are in Wales and the South West, spending more than £750.

But Kerry believes £500 is a massive underestimation.

“Most families I know spend much more than that at Christmas. If you have two children and spend £100 on each child that’s £200 before you’ve even started. A week’s food shopping for a family is around £150 and at Christmas there are lots of extras people to feed. And then there are the Christmas decorations and the extra money spent on going out.”

Kerry, who runs family leisure magazine Raring2Go, believes a lot of Sheffield families will be struggling this Christmas. “Some people pay for presents on their credit cards because it’s tough when kids want all these fancy presents, parents really feel the pressure.”

But putting Christmas on the credit card only makes matters worse, as debt expert Steve Wilcox, who works for the Citizens’ Advice Bureau on Spital Hill, explains.

“We ask people to ask themselves ‘do I need to spend this much when I haven’t really got it?’ So many people put it all on credit cards and then they’re paying such high interest for the rest of the year that their children suffer in the end anyway.”

According to Steve, the best way of paying for Christmas is to save up as early as possible. “If families start putting a bit of money aside now for next Christmas they’ll soon have hundreds of pounds without even noticing,” he said.

But while credit card debt can quickly mount up, even more worrying is the number of people using credit websites which lend lumps of cash to be repaid over 14 to 52 week periods - with huge repayments.

With an APR of 272 per cent, borrowing £300 from some such firms over a 52-week period costs a staggering £546.

And even more alarming are the underground money lenders - known as loan sharks.

Steve said: “This is the worst end of the borrowing spectrum. Loan shark activity is not quantifiable statistically, simply because it is an underground phenomena, so we don’t know exactly many loan sharks are operating in Sheffield. But a few years ago the illegal money team, which researches underground loans, gathered evidence that led to several prosecutions in Sheffield. When you’re borrowing money off loan sharks it can get very nasty.”

But none of this is necessary. There are ways to curb the costs at Christmas.

“I use a lot of coupons and vouchers,” says Kerry.

Websites such as offers discount codes for all manner of treats from toys at Argos to day trips across the country and help keep the cost down.

Retail chain TK Maxx commissioned a survey about Christmas spending and six out of ten people aged 45 to 64 said they were not looking forward to it.

Parents reported being worried about Christmas and as many as 60 per cent of the adults surveyed said they were ‘less than enthusiastic’ about festivities.

Everybody is feeling the pinch.

But, like Steve says, it’s better to save up or budget than borrow.

And splashing out on credit cards now will only imean hardship next year when the bills come in.

Perhaps this year will bring us back down to earth with our excessive consumerism.

It is, after all, the season to be jolly - not bankrupt.

Top tips for making the festive season more affordable

Scour the internet for voucher codes and discount offers.

Use cashback cards such as the Utility Warehouse discount club.

Make what you can yourself, such as wreaths and home decorations.

Shop wisely - it may be cheaper to buy from a butcher and greengrocer then to go to the supermarket and spend hundreds of pounds on items you don’t really need. Remember - this is Christmas, not a nuclear fall-out.

Try and spend time with family at home rather than dashing out to the sales after Christmas. There is more to life than shopping.

Limit gift expenditure and ask yourself whether your parents really need any more nick-nacks.