Christmas is the best time of year for millions of families. Still, the presents, decorations, parties, and celebrations can quickly add up, putting pressure on stretched household finances and causing a headache that will last months.
Overspending is all too easy, getting caught in the excitement and spirit of giving, but if you approach the festivities with a level head and a budget, you will avoid ending the year in the red.
Talking Retail reports that 80% of people are worried about managing their Christmas outgoings, primarily due to inflation and living costs. The tips below should help you avoid getting into debt and plan for a warm, cosy holiday without worry.
1. Planning for Christmas Gifting
The first step is to create a budget – you don’t need an elaborate spreadsheet! Make a list of everybody you’d like to treat this Christmas and decide how much you can afford to spend on each person.
It’s worth checking your savings or adding up your income expected in November and December, so if you stick to your maximum, you’ll remain within your financial limits.
Around 11% of households expect to increase their debt or take on borrowing to cover the costs of Christmas, so being prepared and diligent with your spending is the most important task.
Don’t forget to factor in your everyday bills, such as rent, utilities, and groceries – they won’t disappear just because it’s Christmas!
2. Stay Organised With Festive Plans
Most people are manically busy over the festive period, with parties, family gatherings, taking children to meet Santa and attending church services and nativity plays. An organised calendar can go a long way to avoiding overspending.
Decide whether you can afford any days out, how many, and how much of your savings or income you can allocate to the day.
There are plenty of low-cost or free events, such as watching Christmas lights being turned on, which won’t cost anything! We hope these straightforward tips help you navigate the spending hype over the holidays with confidence – we recommend checking out this Ultimate Festive Finance Guide if you would like further advice about managing your money over Christmas.
Plan your commitments, pick and choose which social events to attend, and you’ll minimise the potential of making a mad dash to the shops to buy a present for the host or a new outfit that wasn’t in your original budget.
3. Avoid Spending on Store Cards
Retailers know that we spend more at Christmas than at any other time, and you’ll often be bombarded with offers, discounts and store cards that offer you the chance to spend at will without having to pay anything back: until the New Year.
Although Christmas is a big celebration, it is only a day or two, and you don’t want to find yourself with a huge credit card and store card debt.
If you need to borrow and have the income to repay any new debts, the best option is to use a regulated, trustworthy bank or lender rather than taking out emergency credit cards to cover the cost of a big shop.