It is that time of year again. The UK retail industry is using it's advertising muscle to cajole us into spending as much as possible. The shops, both on the High Street and online are packed with tempting goodies and according to the experts, much of this spending is going to be done using credit. The terrible thing about the financial world we live in at the moment is that many people don't have access to credit at reasonable rates of interest. We have all seen the offers of as much cash as you want at eye-watering rates of up to 1300% APR. That's right, no mistake, 1300%!
I was brought up to observe the Micawber Principle. If expenditure is less than income, happiness. If it is more, misery. So as usual at this time of year I am advocating a careful eye on the finances. Many people know the horrible sinking feeling when the January credit card bill come in and you can't believe the amount owing. It's too late when you get it, now is the time to avoid the trap!
Sorry about that, but you know it makes sense. I can remember a time when a Christmas stocking held one outstanding present, an orange and if you were lucky during rationing, some sweets. I have to report that I was never deprived and had at least as good a Christmas as today's children who are used to a pile of presents, not just one. I can't help wondering whether a lot of this is due to parents being anxious in case their children lose out in the bragging contest with their peers in the playground after the holiday. Is it a form of buying affection? Unfortunately those nice people who make the advertisements understand this all too well and play on it. There is no sentiment when you are chasing sales in a competitive market place.
As many of you know, I spent a lot of my working life in Scotland, particularly with the farmers. New Year is a more important festival there and is seen very much as a beginning of a fresh year. I don't know whether the tradition still exists but the aim was always to pay all debts before New Year's Day and have a clean start. I suspect that to many, this is an impossible dream. People in the UK owed £1.503 trillion at the end of September 2016. This is up from £1.451 trillion at the end of September 2015 – an extra £1036.58 per UK adult. The average total debt per household – including mortgages – was £55,683 in September. Taking into account the uncertainties of Cameron's Catastrophe, Brexit, this is frightening.
Once again I apologise for being a wet blanket but this really does merit some thought. However, don't let me spoil Christmas. There is plenty of affordable joy out there if we search for it and I wish you all a happy holiday.
The Christmas lights in London. Sloane Square this week.
