Out Of Control Christmas Spending Cost Me Over £80k – Don’t Make My Mistakes

Jewellery worth £300, a £350 Smythson purse, £400 on an iPad, a £105 foundation, a £500 Missoni sweater, a pair of jeans for £200, a £350 art starter kit, £46 on a candle, £105 on theatre tickets, a £100 perfume and a £1,000 Chanel bag. Nice list, huh? These are just some of the lovely Christmas gifts that Paula* has bought for her friends and family.

As Christmas approaches, people often feel pressured to spend well beyond their means on gifts and food, and frequently end up in debt as a result. The pressure is even more of a strain this year, given the impact the global pandemic has had on all of us for the last two years. A recent study by debt charity StepChange found that two thirds of people are already struggling to afford Christmas.

Christmas is spoken of as a 'magical' time but it also brings financial pressure, with nearly a third of families using borrowed money to buy food and gifts throughout the holiday period. Those who borrow money will take on average seven months to pay it back.

For 40-year-old Paula, Christmas has always been difficult. She told Refinery29 how out-of-control spending has landed her in tens of thousands of pounds of debt, with £30k currently owed on her credit cards.

She has spent thousands of pounds on presents for her friends and family, including a £1,000 Prada bag for her sister. "I would buy gifts for other people, and donate gifts to charities, for my own validation. The charity would say I was great and it became very addictive for me. The whole time I was spending money I didn’t have," Paula tells Refinery29. "I was making my life harder, trying to make everyone else happy."

Paula comes from a troubled background and her issues with money are deep-rooted. When she was 6 years old, her mother became an alcoholic. "It was so difficult," she says, "because we lived with an addict and realistically you can’t live in an environment like that."

She says her mother used Christmas as a way to compensate and would spend hundreds of pounds on Paula and her sister to keep them happy over the holidays. "My mum put so much emotional pressure on Christmas. She wanted everything to be perfect. She would overspend and my parents would argue all the time over money. My dad hated money.

"Christmas used to be the best time of year for me, but my sister and I had this idealised Christmas each year, believing this was what Christmas should be like. It was the only time of year that my mum was happy. She would be happy making others happy and I think I definitely took that on."

When Paula graduated from university, she became an accountant and with her new salary, would spend hundreds of pounds on Christmas gifts for her family. "I would buy my family really expensive Italian clothing. I bought my dad a suit. I wanted everyone to know that I loved them. But I never thought credit cards were debt – I thought I could spend £1,500 a month without thinking."

Every Christmas Paula would host big dinners at her house with 12 people around the table, ensuring she gave them the best experience. "One year, I bought six fresh lobsters for the starter and I’d spend a fortune on cocktails, decorations and even a Santa’s Grotto." On average she would spend £100 per gift on her friends, including a Liberty advent calendar. "I kept an Excel spreadsheet of all the gifts I wanted to buy my friends and family. I would listen to them all year round and jot down the things they liked so I could surprise them for Christmas. If they didn't reciprocate, it would really hurt me."

She compares her spending addiction to a drug habit, admitting that hiding her shopping bags was a guilty secret. "I’d get that high for 10 to 15 minutes and I’d feel amazing that I bought something that someone else didn’t have."

Paula ran a profitable business for over a decade, which allowed her to treat herself to luxury goods from the likes of Prada and Chanel. But everything came crashing down when a fallout with her former partner resulted in her losing her business. When she bought her partner out of the company, it cost her big – and then there were enormous, insurmountable bills to pay. "I felt humiliated and ashamed. Losing my business ruined me," she says.

It was only then that Paula realised how much debt she was really in. While she was spending money on gifts for her family and friends, she was already sitting on over £30,000 debt. She had £20,000 credit card debt and owed money to a loan company, on top of her mortgage repayments. Still she kept spending. "I bought my sister expensive gifts when I was struggling to pay my electricity bill."

The turning point for Paula was when her sister told her about Debtors Anonymous, a support group local to where she lives. "I was too embarrassed to speak to friends about my debt and DA helped me find a group who wouldn’t judge me."

She has been a member of Debtors Anonymous for almost three years now and continues to attend group sessions twice a week. She has undergone the 12-step debt programme – a method to help people manage their debt by setting a budget and using mindfulness to tackle the emotional challenges of debt. "Debt can make you feel suicidal. It hurts people. But my problem was never just with money, I struggled to say no to people. DA helped me realise the reasons why I was doing what I was doing, and Christmas was the biggest thing for me because I had suffered emotional trauma from my mum’s addiction. DA gave me the emotional support I needed."

Joining the group, she says, improved her confidence. "It has helped me love myself again, I never thought I was good enough."

Paula has paid off £80,000 of her debts so far but she has also lost a lot. "I have lost two properties off the back of my debts... I have been taken to court numerous times. I don’t even know if I’ll still have a house to live in next week."

Despite the huge challenges ahead, she’s hopeful. "I will set up another business and get myself back on track again. I do have the ability."

Paula has had to make big changes to her lifestyle. She now enjoys staycations in Cornwall instead of spending thousands on holidays, and opts for cheaper theatre tickets and restaurants. "Don’t get me wrong," she says, "I still believe I should have a good quality of life but I realised I had to make lifestyle changes so I’m not tempted to spend too much. You do appreciate things more when you don’t have access to things you used to.

"I used to have a lot of money and I could do what I wanted and life was easy. It was a huge shock not to have any of that anymore."

Now, when it comes to Christmas, she still wants to enjoy it but has limited her spending and is recycling some presents she bought in the January sales earlier this year. She's grateful for the things she's learned along the way. "Buying gifts never fills a hole in you. You have to find a way of liking and loving yourself from within. I've now realised that I am enough, just the way I am."

Paula’s experience is an extreme example but the festive period can put a huge strain on families across the UK. More than 8 million people are already in problem debt, unable to afford essential household bills and escalating interest payments. So how can we be more mindful about our spending this Christmas?

Richard Lane, director of external affairs at StepChange, says: "If it's going to take many months to repay what you borrow to pay for Christmas, it's worth pausing for a moment to think about whether your friends and family would really want you to suffer financially as a result of your generosity. Most people would much prefer their loved ones to have a financially happy new year than a swanky present.

"Celebrating the festive season is fun but getting into debt for it isn't. Retailers and credit providers must not encourage over-borrowing at the expense of people's long-term financial health."

The charity suggests thinking strategically about the money you spend on Christmas, for example shopping around for the best and cheapest deals or searching for discount vouchers and setting a budget for festive nights out and parties. But most importantly, consider gifts for friends and family that don't come with a financial cost, such as offering to clean their home, do their washing and ironing or teach them a new skill.

Richard added: "If you're already in debt, don't let the pressure or expectation that Christmas can put on you make you feel you have to spend."