How to budget for Christmas?
It is understandable that, for a lot of people, Christmas will be harder than normal. The UK is currently experiencing the cost-of-living crisis. Due to this, families will have less disposable income to spend on gifts and activities. Research shows 29% of us plan to spend less this festive season.
But Christmas isn’t all about gifts.
Families can still celebrate Christmas on a budget and create some amazing memories.
Budgeting for Christmas
Many of us this year have been implementing budgeting plans to stop us from overspending. It’s important to enter the festive season with the same attitude. We have all been there, ‘one last present won’t hurt’, ‘he would love this!’, but it all adds up. Creating a Christmas budget can relieve financial stress and help keep you organised.
According to Finder research, the average person in the UK will spend £602 on gifts this year. If you plan ahead for what you can afford to spend, it can reduce the financial anxiety you may experience. It’s important to remember to budget in line with the increased costs of things.
So how can you create a budget and reduce spending?
Keeping track of your spending
Many workplaces provide employees with an early pay day in December. This is great for last minute presents, but it means that you have to wait longer to receive your next paycheque. If your workplace does this, remember to factor this in when planning your budget.
Once you have set your budget, keep a note of spending to ensure you don’t go over. Whether it’s on your phone, in a notebook, or even an Excel sheet, choose what works for you.
It’s important to track every outgoing, from travel to Christmas cards. Although these may be small purchases, they can all add up to a much larger amount than imagined. Noting down your spending can also highlight areas where you can save money.
How to limit your spending?
For larger families or friendship groups, buying everyone a gift can add up. Suggesting a Secret Santa is a great way to keep costs down, as you don’t have to buy individual gifts.
Secret Santa is an anonymous gift exchange with a set budget. Elfstar is a free app that helps organise your Secret Santa. Your family and friends can set ‘Wishlists’ to ensure that you are spending your money wisely. The gift exchange is a chance to spend quality time with loved ones and guess who got who the gift.
Another gift idea for couples or families is to create a hamper. In this, you can put anything that you know they like, from festive snacks to a candle. This is cheaper and can be a more thoughtful way of gifting rather than buying individual gifts.
Besides Christmas Day itself, the whole month of December can be expensive. Barclays found that last year British households spent over £250 on Christmas activities. You can try to reduce spending by doing activities on weekdays, when prices are cheaper. Or, instead of going out for dinner, why not create a festive inspired charcuterie board? Simple changes like this can save you more than you think.
Christmas Deals
30% of people start their Christmas shopping in November. This is no surprise as both Black Friday and Cyber Monday occur in November. During the entire month, many stores discount products and hold exclusive promotions. In 2022, 196.7 million consumers shopped on eCommerce sites between Black Friday and Cyber Monday. Most of these purchases contributed to Christmas gifts for loved ones.
It’s important to remember that these discounted items are only bargains if you were going to buy them anyway. Buying things only because they are on sale can result in extra and reckless spending. To ensure you are actually getting a good deal, it’s advised to monitor the price of products. This way when Black Friday and Cyber Monday arrive you can confidently judge if it is worth buying.
Many people are going to feel the strain at Christmas this year. It’s easy to get carried away and overspend. We have all been there. Christmas is the time of year when everyone comes together and shouldn’t come down to how much money you spend on gifts. Understanding the best way to save, and spend your money is crucial in this uncertain time.