Budgeting can seem like an impossible task and we all know that Christmas spending can easily get out of hand. Follow our easy guide on how to save money this Christmas
Even though it’s early, some shops are already stocking Christmas cards and decorations, hotels are advertising their deals for office parties, and retailers are starting to stoke social media speculation over which retailer will create the best Christmas advert for 2018.
It’s hard not to be sucked into the extravagance of the season, but it can be very bad news for your bank balance if you don’t plan ahead. Here’s how to have a savvy Christmas without missing out on the fun. The secret is in the preparation.
Work out what you can afford
Depending on your job, you probably have two or three paydays between now and Christmas. Think about how much you will have left over for spending once you have paid for essential household bills.
Then divide sum that into three categories:
• Entertaining at home
How much you allocate to each category depends on your lifestyle. If you have a lot of children or grandchildren, then you might anticipate spending more on gifts and meals, and perhaps less on going out. If you need to attend a lot of Christmas dinners and drinks for your work, you’ll need to factor in the cost of taxis, dry cleaning and perhaps a new suit or dress.
Presents: start planning now
Make a list of who you will need to buy for, and how much you are going to spend. If you have a large family, you could discuss with them how to economise.
Set aside a little each week for presents—you might be able to start buying items now that are on special offer, or pick up a bargain in the sales that you know your friends or family would like.
Take care on Black Friday, which falls on November 23 this year. Major UK retailers like Amazon, John Lewis, and CurrysPCWorld are likely to offer tech deals and three for two deals on toys and other goods.
There are certainly going to be bargains—laptops, tvs, mobile phones and jewellery are all likely to be discounted.
It’s good to think about what you really need before you start browsing online and find out what the price is now, so that you can compare and decide whether the discount is significant. Take care, as it is easy to get carried away in the frenzy and even easier to click and buy without having to part with “real” money.
Entertaining at home: don’t be afraid to be frugal
Advertisements suggest that you will be short-changing your family if you don’t spend lavishly, eat extravagantly, and shower your family with presents.
Everyone from credit card companies to food retailers play on our fears that a Christmas without a five-course meal and the finest wines is somehow an inadequate one. Cookery programmes hint that you should be roasting the perfect turkey, or you’ve not done Christmas properly.
Don’t fall for it. For most people, the joy of Christmas is spending time together. Can you even remember what you got for Christmas last year, or how the roast potatoes turned out? Don’t get hung up on the gifts and start stressing about the meal. Prioritise time with your loved ones. That will be their lasting memory.
Socialising: slim down your festive commitments
Works parties, office drinks, impromptu get togethers – all these cost money. While they can be fun, they are also exhausting. Rather than limp towards Christmas with an early hangover, lingering tiredness and an empty wallet, choose which events you need or want to attend, and don’t be afraid to turn down the others.
Borrow in the right way
Interest free period, perks, loyalty cards with points, vouchers and cashback– these can spread the cost.
Having a financial plan and the right type of credit card can prevent a financial headache in January.
If you need to borrow, a credit card with a long interest-free period for purchases, or a balance transfer card onto which you can move existing debt is a good option. Don’t take on debt you can’t afford to repay, and make sure you have thought about how to pay off the balance on your card at the end of the interest free period.
You can ask your current account provider to extend your authorised overdraft. This can be a cheap and simple way to help with cashflow in December. You’ll still pay some charges and you must stay within your credit limit, or you’ll be faced with heavy penalties. Unauthorised overdrafts are very expensive, and the costs soon mount up.
Don’t forget to keep all your receipts, or ask the store for a gift receipt in case the person you are giving the item to needs to exchange it.
How to get more help
If you are worried about the cost of Christmas, or just feel that your finances are getting on top of you and you could do with some advice, you can contact a free debt advice service.
You should never pay for this advice as there are a number of excellent charities which will help you sort out your money and get you back on track. They can take an overview your finances and help you come up with a plan to avoid getting deeper into debt. It doesn’t matter if you are struggling with a debt of £1,000 or £100,000, they can help you. They also welcome people who aren’t in debt but who feel that making ends meet is a struggle. In fact, it’s better to come as soon as you are worried about your money—the sooner you get help, the simpler it is to find a remedy, but it is never too late.
Click on any of these links for more advice: