Those consumers who are to borrow money to fund their spending over the Christmas period should look to get their finances organised as soon as possible, one industry expert has asserted.

According to Susan Hannums, savings manager for AWD Chase de Vere, Britons who have borrowed, whether via personal loans, plastic cards, overdrafts or other means, need to think about getting back into the black as quickly as they can. Ms Hannums advised that in “the majority of cases” people will be paying a rate of interest on their debts that is higher than that they are receiving on their saving schemes. This led the savings manager to state “ultimately you should be thinking about clearing that debt as quickly as possible”.

She said: “Definitely you want to be looking at clearing that debt as quickly as you can, so the best thing to do is to sit down with a pen and paper, work out your budget for the coming year and work out how much you can comfortably afford to try and clear those debts as quickly as possible. Obviously if you’re heavily in debt then that’s your priority, but if you’re sort of comfortably in debt, then I think it’s sensible to at least put a little bit aside and forward plan for next year.”

The AWD Chase de Vere savings manager added that if they can do so, consumers should take steps now to prepare their finances for the 2008 festive period. By setting a regular amount of money aside each month, no matter how small, it was suggested that people could find that their attempts at money management are in a much more comfortable situation by the time next Christmas approaches. Consequently, such Britons may find that they are able to not only pay for gifts and festive food with ease, but also meet other essential day-to-day financial demands such as utility bills, credit cards and secured loans.

Ms Hannums also pointed out that it is “no secret” that many people are to come under increased financial difficulties over the course of next year. One particular area of strain will be for the homeowners due to face a rise in monthly mortgage payments once their fixed-rate deal comes to an end. However, she also claimed that “everything else around just seems to be going up – gas, electric, the whole shebang”.

With all areas of financial pressure set to increase over the coming year, now could be a prime time for consumers worried about how they will manage their money to take out a cheap loan. The selecting of such a form of borrowing might well be able to help many to meet various demands for payment quickly and effectively. And for the 5.5 million people a recent Mintel study indicates are due to see an increase monthly mortgage costs, a cheap loan may be able to provide valuable help with finance. Toby Clark, senior finance analyst, added that as many homeowners might not be able to absorb the rise in costs, millions of Britons could “really start to suffer financially”.

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