Ways to save money in the run up to ChristmasNovember 8, 2023
Avoid the overspend when socialising at ChristmasNovember 30, 2023
December is next month and for many, thoughts turn to affordability and how Christmas is going to be financed.
So who’s paying for Christmas?
The joys of Christmas are intertwined with the stress of managing their finances during this expensive season. From gifts and decorations to food, drink and travel, the costs can quickly add up leaving families torn between balancing seasonal merriment and financial responsibility.A recent survey conducted by the Office for National Statistics revealed that the average UK household spent £642 during Christmas 2022, making it a crucial time for families to be proactive in managing their finances. This is especially so when recent surveys from the likes of salaryaftertax.com, ONS, National Childbirth Trust and NimbleFins have found that the average family cannot afford to exist because their outgoings regularly exceed their income. Throw Christmas and the financial pressures into the mix and you are looking at a credit fuelled period.
So how can an average family in the UK finance Christmas? Who’s paying for Christmas?
Set a realistic budget
We have already set out some tips and tricks for how to save money and spend wisely at Christmas in our previous blog posts here and here.
A budget helps to keep you on track with spending but also stops any splurges because it taps into thoughtful spending. You will have assessed your financial situation and determined how much you can comfortably afford without straining your finances. With this in mind, it will prevent overspending and keep your finances on track.
Embrace the power of savings
If you are organised and in a position to save, then you may have been saving a little each month from the start of the year to cover Christmas. This is a good idea to help ease the financial burden that Christmas can bring with it.
If this is something that you have missed out on, then fear not. Explore creative ways to boost your savings in the short term, such as cutting back on non essential items, using cashback offers and taking advantage of discounts and sales that many retailers are putting in place right now to encourage people to spend.
Smart shopping strategies
Make the most of your budget by adopting savvy shopping strategies. Prioritise thoughtful gifts over extravagant ones, and consider setting up a Secret Santa arrangement with extended family and friends to minimise the number of gifts to purchase. Utilise price comparison websites and apps to find the best deals, and take advantage of seasonal sales and promotional offers. Avoid the temptation of impulse buying and stick to your budget.
Are you splitting the cost of Christmas?
It is a time to get together with loved ones, however hosting comes with its own expenses. Nobody wants to be in a position where they miss out on seeing family and friends because of financial issues, therefore can there be a way of splitting the cost of Christmas with others?
How to share the costs
Talking money with family and friends can be awkward or uncomfortable for some. However given that hosting at Christmas can become a costly affair, it is best to be open with others. Instead of asking for money towards the meal (which you can totally do if comfortable), allocate responsibility for elements of the day to others. This allows others to have a sense of collaboration over the day with them bringing the wine, dessert, crackers, chocolates, etc.
If you have a large family and are worried about Christmas spending, you could approach the idea of limiting presents to only children for instance, or setting small budgets for each present. Being mindful about spending and dropping the guilt associated with the financial pressures at Christmas, allows you to avoid putting things on credit that you will have to face in the New Year.
Obviously, we are not against the use of credit but we all need to be mindful of the pitfalls when using credit and to only resort to it if we know that next month, the amount can be paid off in full.
Post Christmas finances
Financial management post Christmas is just as important as pre-Christmas financial planning.
Clear any debts incurred during the festive season to avoid unnecessary interest charges and restructure your budget to accommodate debt repayments. Consider carrying out a money overhaul which can help you to make any adjustments in spending habits over subsequent months.
Evaluating your Christmas spending and learning from the experience will enable you to better plan for the following year, ensuring a more financially secure and stress free festive season.
If you have read this and are in a position where you are worried about your financial situation, then contact us and speak to one of our experienced and trusted advisers who may be able to offer you some help.