Santa and the loan sharks

Shedding holiday weight won’t be people’s biggest problem after Christmas.

“The whole thing is a scam. Christmas was invented by Hallmark to sell cards.”

It’s a conspiracy theory that’s doing the rounds on the internet in one form or another.

The point of course being that Christmas is becoming less of a religious holiday and more of a commercial holiday.

Or maybe capitalism is the religion of choice in the 21st century?

One way or another, the “most wonderful time of the year” ironically brings people a lot of stress.

The act of gift giving is very nice in theory and in fairness some people truly enjoy it.

But for others it’s more of a burden. Even more so when money is tight and people have to turn more creative or buy on credit.

Last month I wrote how UK retailers brace for a cold Christmas this year. Today I want to look at the other side of the coin.

How do British Christmas shoppers cope with the annual festive period?

Spend now, worry later

When thinking of Santa Claus, people picture a round man with a white beard and coloured cheeks that match his bright red costume.

But he didn’t always look that way. Even Santa went through different phases before he settled on his now iconic look.

Before the 1930s Santa Claus showed up in some circles as a tall gaunt man wearing a bishop’s robe. In others he appeared as a small elf.

But ever since Coca-Cola got the old man hooked on their sugary drinks, that was it. Santa’s been walking around with a belly that shakes like a bowl full of jelly ever since.

Father Christmas’s transformation from a lean to a well-fed man is a nice metaphor for the way the Christmas period has developed.

What was once a religious holiday is now an opportunity to spend more than we can afford. All happily endorsed by brands that will spend a record £6bn on Christmas advertising in Britain this year.

In a previous article I mentioned that British consumers are expecting to spend less on Christmas compared to last year.

Not so strange when wage growth hasn’t been able to catch up with inflation for seven months in a row.

People have less money in their pockets and retailers, who have a lot riding on this time of the year, believe they will take a hit.

Still, many will find it difficult to escape the festive spirit. Their motto must be: spend now, worry later.

A recent study found that one in four people “get caught up in the commercialism and feel under pressure to buy presents for their partner, despite not always being able to afford it,” it says in the Independent.

That’s the crux of the problem. The joyous festivities clearly become less joyful when you don’t have the money to lavishly spend on presents.

Christmas has become a social obligation that people find difficult to opt out from even when they don’t really have the money to participate.

So what do people do when they want to take part in all the Christmas glee anyway?

Christmas hangover

Well, they borrow.

About six in ten British households are taking out loans or using their credit cards to pay for Christmas gifts.

More than half of British families (56%) admit that they’re making “significant financial sacrifices” to put some presents under the Christmas tree.

For families with kids this figure is 76%.

I’m not surprised so many people turn to credit because it seems to have become readily available again.

This week alone I received two letters from companies suggesting I take out a line of credit with them. I can see why it tempts people to accept these offers, especially in the month December.

Only problem is that this short-term “joy” tends to turn into a long-term headache.

People delay paying rent, mortgage and other household bills while it takes households that choose to borrow on average four and a half months to pay back the money.

“Unsurprisingly many people want to forget financial problems at this time of year but splurging over Christmas is leaving many households with a hangover they can’t shift for several months,” savings expert Calum Bennie told IB Times.

“By all means enjoy the holidays, but don’t become too reckless in the face of peer pressure or idealised visions of what Christmas should be from TV advertising or retailers.”

I guess there’s never a good time to get into a lot of debt, but it could be even more problematic now.

Britain’s facing the longest fall in living standards for more than 60 years. Rather than taking out more credit, households should be building up reserves.

It looks like shedding holiday weight won’t be people’s biggest post-Christmas problem this year.

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