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You’ve been managing your finances all wrong – eight ways to make sure your wallet doesn’t suffer over Christmas

OUR love of Christmas sees us plunge into debt by an average £439 during the festive season – with most of us taking until EASTER to pay it all off.

But with many families ­struggling to make ends meet this year, excess festive debt could cause huge long-term problems.

You’ve been managing your finances all wrong – eight ways to make sure your wallet doesn’t suffer over Christmas

Although it’s tempting to spend more than you can afford, it is never a wise idea.

Here are the top festive financial mistakes to avoid if you want to sleigh your spending.

NOT SETTING A BUDGET: Working out a realistic budget forces you to calculate what you can afford.

Ensure you stick to it for a happier new year.

MISSING PAYMENTS TO FUND CHRISTMAS: We all need a little extra cash at Christmas but never stop paying your other bills to get it.

If you miss regular ­payments on your utility bills, mobile phone, credit card or debts, you could be hit by late payment charges and it will affect your credit rating, making it harder to borrow in the future.

BUYING DEALS YOU DON’T REALLY NEED: It doesn’t matter if an item is 90 per cent off.

If you don’t want it or need it, then you’ve spent money, not saved it.

USING BUY NOW, PAY LATER SCHEMES: A third of adults admit to using BNPL schemes like Klarna or ClearPay, but they can entice you into spending much more than you can afford, especially at Christmas.

Missing a payment also clocks up a negative rating on your credit report.

OPENING NEW STORE CARDS: The average annual percentage rate for a retail store card has hit 27 per cent.

Although you might be offered an opening deal or gift, the cost is likely to be higher than using a normal credit card.

TAKING OUT A PAYDAY LOAN: Payday loans are one of the most expensive forms of borrowing.

Over a year, the APR interest rate could be up to an eye-watering 1,500 per cent compared with 22.8 per cent APR for a typical credit card.

They are also very hard to pay off, so you may get stuck in a cycle of debt.

BUYING FOR MORE PEOPLE THAN YOU CAN AFFORD: This is the most common cause of Christmas debt.

While we all love to be generous, this year it’s fine to talk to friends and family to reduce the amount of presents you buy.

You may find it helps others too as they won’t feel obliged to buy back for you.

NOT READING THE SMALL PRINT: If the gifts or festive items you buy come with a ­guarantee or contract, make sure you read and understand it before you commit.

Make sure there are no hidden extras.

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