Now that the Summer holidays are nearly over, children across the UK are back to school and life takes on a bit more structure and routine, the next big seasonal holiday that is sure to put a dent in your wallet is Christmas. Yes, we’ve mentioned the C word but it’s better to budget for Christmas earlier rather than later.
‘Tis the season of goodwill and gifting, which brings with it warm, fuzzy feelings but also potential shame around money; not being able to afford gifts for everyone; comparison; the lure of credit, and starting the New Year in debt that could have been avoided.
We are here to show you how to budget for Christmas (or indeed any big planned expenditure) and the time is NOW. You will find that the earlier you start spreading the savings, the less stressed and less likely it is that you will turn to credit.
According to the Money Advice Service, the average UK family was planning to spend over £800 on Christmas last year, which was an increase from 2019.
Not everyone has £800 lying around to blow on Christmas, especially after the last 18 months, so budgeting early is the way forward.
Just an FYI before we start – if you have not read our Money Overhaul post then do it now – it will give you lots of tips as a basis for taking control of your finances and you will know where you stand financially to go onto the next stage of budgeting.
According to research, at least 30% of the UK population get into bad debt due to their expenditure at Christmas.
This can be due to splurging, not planning correctly and not saving early enough. One of the worst feelings is of regret and shame going into the New Year with bad debt hanging above your head. This is why we want to help you with some ideas on how to save now to avoid that pain.
Think about how much you will realistically spend at Christmas and then divide that amount by the number of weeks left up until that date. What does the figure state? That is how much you should aim to save each week to reach your savings goal.
You need a figure in black and white of what is left after all your essential bills are paid that can be used as savings. To do this, you need to work out your accurate incoming and outgoings. Ensure that you are looking at your statements, your direct debits and standing orders from all accounts and totalling them up. You may find that you are paying for things that you had forgotten about – a subscription here, or a gym membership there that you no longer use. Cancel them because that’s a saving for the Christmas pot.
If you find that you are unable to reach your goal and you are in fact in a position where you are overspending, then there are steps to take to help you which are detailed in our Money Overhaul blog.
How much do you usually budget for Christmas? How will you do it? If you have any top tips then please let us know so that we can share on our socials!
If you are finding the prospect of Christmas difficult to deal with from a financial point of view, then please contact us. We are happy to discuss the options that could be available to you.