Even the most careful of spenders can overdo Christmas. What with all the food, drink, presents and parties, it can be easy to dismiss the budget in the run-up to the big day. We then spend the New Year scrimping and saving, trying to repair our poor finances.
Last year, the average UK resident spent around £567 on Christmas*, with 44% saying they went over their budgets**. Not only that, but there has been a rise of 84% in people spending up to £700 on presents alone, putting most of their spending on credit cards or taking out loans. ***
The way we buy things is also having an effect on costs, with the value of online shopping nearly doubling over the past five years, now accounting for up to £1 of every £6 we spend.**** Events like Black Friday could also be increasing our spends, bringing additional costs into November, as well as December.
But everyone knows that this time of year is expensive, so how can you go about managing your finances during the festivities? We don’t want money worries to take your Christmas joy, so we’ve explored a few ways you could keep you and your bank account jolly this season.
Christmas should never be a surprise; it happens every year. So, although you might look super keen, it’s always a good idea to have a clear plan in mind early on what you need to buy and for who. Drawing up a budget for Christmas – featuring whatever you intend on buying as gifts as well as any additional socialising – and including it within your everyday, household budget, could help you manage the overall effect on your finances over a few months.
Although many retailers or even family members do not make it easy at this time of year, resisting the urge to break this budget, or spend more than you can really afford could be the key to coming out the other side of the season in the black.
Put money aside, buy early and keep track
Although it may be tricky to think about Christmas when the summer is in full swing, starting to save a few months in advance could give you the upper hand when it comes to the festive months. If you tend to wait until December hits, then you may find the time pressure forces your hand into spending more. Buying what you need throughout the year can help spread the cost, rather than it all coming out of the last payslip of the year.
Keeping track of your spending could make life a little easier during the festivities. By simply creating a list of everything you need (excluding everything you want), and sticking to it, you could find you’re in a much better place to manage the New Year bills when they come through.
Refine your attitude to Christmas spending
Do you really need that extra pack of pigs in blankets? Isn’t the tablecloth from last year going to work just as well this time around? Are you simply going with the crowd and keeping up with social pressures? It is worth considering these before possibly overspending and placing yourself in debt, just for one day. After all, the most important part of Christmas doesn’t really cost a penny. The ideal is to be able to leave the stress of Christmas out in the cold, while you tuck into your reasonable priced dinner with the people you love.
Be realistic with what you can afford
Create a budget and stick to it! Careful budgeting could help you to stay organised and on-track with your spending. Indulging because “it’s Christmas” may make you happy in the short-term, but probably not your finances.
Christmas brings with it a lot of traditional pressures, so if you don’t think you can afford those festive liqueurs or the posh chocolates that you have every year, then maybe leave them on the shelf.
It also doesn’t need to be any different to what you eat normally; premium ranges sales soar over Christmas because of a wish for something “fancy”.****
Be aware of consumer advertising and shop online
The Christmas advert has become a massive phenomenon, and although brings a sparkle of joy to our screens, it can bring with it an increase of spending. It may need a lot of restraint, especially in stores. Shopping online could stop the temptation for added extras sneaking their way into your trolley.
Recycle bows and gift bags.
Keep gifts bags and bows when they have been taken off wrapping paper and use year after year. It may not seem like much, but if you were to add up how much you spend on bows and bags over the years, you may be surprised… it all adds up!
We wish you a very Merry, financially savvy Christmas!