Christmas is a time to be merry with your friends and family, but it can also be a time of financial stress, due to the pressure of making this time of year extra special for our loved ones . One of the main reasons for this is that we tend not to think of it until very late in the year, when it is just around the corner, which could blur our budget.. As a result, we tend to overspend, or even worse, borrow money to get through.
With Christmas a few short weeks away, you can still be hopeful and know that it may not be too late to set yourself up for an affordable festive holiday. You can still check out our Tips to Control Holiday Spending and our advice on How to Manage Your Spending This Christmas, and do your best to spend carefully and budget well.
For next year, however, you can avoid the Christmas money drama altogether, by saving up throughout the year to ensure you have all the money you need for the holiday season.
Create a Christmas Budget
To ease the financial stress of the festive season, creating a ‘Christmas budget’ is a good place to start. With the possibility of an upcoming Christmas bonus, or early December pay, you can still keep track of the items you’re spending on and here’s how to start:
- Consider what you can afford. It’s time to be real with yourself about your finances. Gather your previous months bank statements to examine your incomings and outgoings to see what you can spare for holiday shopping. This can help you figure out where you can cut costs. Our blog on the best budgeting apps provides some tools to help you manage your money in one place.
- Make a list of what you need. You should start by deciding on the items you need to ensure that the essentials are not forgotten. You can break down your list into a priority order including things you need to buy for groceries, Christmas decorations and activities; then assign a spending limit next to each item. Luckily for you, lists like these can be used every year and for different holidays. Remember Christmas last year? DId you buy way too much food and have far too much left over? If so, cut it back this year – it doesn’t mean that you will do without, but it means that there will be less wastage and reduced costs which can go towards something else.
- Look at more ways to cover the cost. After you have reviewed your finances and created a list, but still think you will be unable to cover your current budget, you should revisit your list to see if you can cut back even further.? You could also check if you qualify for cold weather payments or any other unclaimed benefits to help boost your income.
- Sales and special offers. One of the great things about festive season shopping is that there are lots of sales and special offers which could help with costs and allow you to purchase items affordably, especially if you’re going to specific stores or thinking about bulk buying. Take a look at some of the offers available to you. Remember your budget though – don’t buy something that you don’t need just because it’s a good deal.
- Shop early. You will have a better chance of finding the items priced within your budget if you choose to shop early, as leaving things for last minute could cause panic buying, which leads to stepping out of your budget and overspending if the prices have changed.
Can I Still Save?
Saving up for Christmas may sound simple when we talk about it like this, but there’s always the question of just how much you will need to cover all the usual holiday expenses.
You are probably asking yourself, how much have you spent in the past to comfortably make it through the holidays, and how much are you spending this year? Are you overspending, or are you being reasonable in your choices? If the former, it’s a good idea to create a better budget this time around, to make sure that you don’t overspend and put yourself in a worse financial position for the months to follow. If it’s the latter, you can use this guidance to have a better idea of how much you will need to put aside for next year.
Even if you don’t manage to save money for Christmas this year, you can save money on the things you buy. Shop around for the best deals and remember that you don’t always have to buy branded products; some own-brands are the same (if not better in some instances) than branded products.
How Much Are Others Spending?
The Bank Of England states that people tend to spend about 29% more in December than they do in other months. This may be an overspend on the part of many people, but it is a figure you could use to work towards.
For example, if your usual spending amount is £1 000 per month, you could aim to save up an extra £300 throughout the year to see you through the holiday season. However, you would need to find the figure that fits your family, as well as your spending habits and income. These are averages, and may not be at all similar to your normal rates of spending, so be sure to keep this in mind when working out your budget and savings plan that is true to your lifestyle.
Gift Ideas To Save Money
Giving and receiving gifts during this time of year feels special and shows how much a loved one cares about you. Even with the financial challenges we face, there are still ways we can still share gifts:
- Get crafty. This is a perfect idea for families who have far away relatives that are visiting for the holidays. Together with your children, make gifts instead of buying them. Hand and homemade gifts are always meaningful especially during the festive season, which also doubles as an affordable fun activity you can do at home.
- Re-gift. Don’t feel bad to give away a gift you once received but never used. If you never had a purpose for the gift, but know someone else who would appreciate it more, it would be a good idea to re-gift it.
- Go for family presents instead of individual ones. If you have a big family, there can be pressure to buy for all of your nieces, nephews, cousins etc. This can be very pricey and time consuming. Instead, think of a gift you could give to the whole family – for example a board game, or something they can do together. You could even offer to babysit for family members with young children to allow them to go out, which costs nothing but your time. This helps families create memories rather than accumulate things they don’t actually need.
If you are struggling with your finances and you don’t know how to improve your situation, please contact our non-judgmental team at Debt Movement for caring and understanding debt guidance and solutions.
