You’ve probably already spotted the chocolate Santas in the supermarket, and you may have even received an email promoting fancy advent calendars.
There are now less than 100 days to go until Christmas, which depending on the type of person you are, may fill you with dread, or get you humming “Last Christmas” as you start drawing up present lists.
December is likely to be your most expensive month so it’s wise to start preparing early. Last year, the average household spent £1,811.70 on Christmas festivities, according to MoneySuperMarket, which works out as 80% of the average monthly income.
But it is possible to celebrate Christmas without waking up to a January debt hangover – and while keeping your long-term money goals on track. Unlike Santa, you don’t need to get into the red this holiday season!
Here are six tips to create a budget-friendly Christmas.
1. Start budgeting now
This doesn’t need to feel scary! Budgeting is fairly simple, it’s about not spending more than you earn, and putting some money aside each month to help you reach your goals. In this case, a short-term goal is to have extra cash for Christmas.
If you’ve never budgeted before, list out your income and monthly expenses. If your expenses exceed your income, think about what you can cut back on. Maybe you could cancel Netflix, or move your internet or mobile phone to a cheaper provider? Any savings you make now will boost your Christmas budget. We have lots more tips in our budgeting guide.
2. Create a Christmas budget – and a festive fund
Now you’ve worked out how much you can afford to spend, draw up a Christmas budget with categories such as gifts, decorations, food, travel and entertainment. This will help you allocate your money and avoid overspending.
Consider setting up a separate festive fund and paying some money in each month. This could be a savings account, a “savings pot” in your online banking or mobile banking app, or a physical envelope or jar. Whether it’s £10 or £100, it will build up as we head into the holiday season. A good tip is to pay money in on pay day, and then you won’t miss it in your account or accidentally spend it.
3. Stay motivated and be mindful
To stay motivated with your budgeting and saving, try and be mindful with your purchases between now and 25 December. Do you really need to buy those cashmere socks – or could you use that money to buy your best friend a present? Or better still, put those cashmere socks on your present wish-list and hopefully a loved one will buy them for you!
Try not to be swayed by the avalanche of Christmas marketing. Do you really need that £75 gin advent calendar, those novelty pyjamas, or a light-up outdoor penguin?! Of course, you don’t have to be completely Scrooge-like. Changing your habits can help finance some festive glow. For example, bringing a packed lunch to work each day = cash to buy yummy Christmas treats to take to parties, give as presents or scoff on Christmas Day.
4. Boost your income
Now you’ve got your spending under control and you’re regularly saving, see if you can boost your income to top up your festive fund further.
One easy way is to sign up to a cashback website or app. Every time you buy something with a certain retailer, you’ll get some money back, often around 5% or 10% (but this can vary and be more or less). You can also get cashback with some current accounts and credit cards. But don’t let the idea of cashback tempt you to overspend – only buy things you actually need.
You could also make some extra cash by selling things on eBay or Vinted. Got a present from last year that you’ve never used? Sell it!
5. Cut the cost of Christmas
There are sackfuls of ways to cut the cost of Christmas. First, do a stock-take of last year’s stuff. You may have leftover Christmas cards and wrapping paper so no need to buy those again. Check out the Black Friday sales, and look for other sales and discounts.
Consider getting crafty and making homemade gifts or decorations. How about gifting a memory? Printing a photo and popping it in an inexpensive frame is a thoughtful present that won’t break the bank.
6. Tell your family and friends
Chat to your loved ones about your budget. Agree price limits on gifts, or even do a Secret Santa to reduce the number of presents you have to buy. Use an online tool like Elfster to remove the hassle and keep it a surprise.
If you’re hosting, ask guests to bring food or drinks to share the cost. Don’t be embarrassed, they’ll be happy to help! Of course, you may have to do the washing up, but at least you don’t have to travel home afterwards, saving you extra money on travel – and hopefully from tears too (Wham! Get it? Ho ho ho!).
