How to spread the cost of Christmas

Apart from Scrooge, everyone loves Christmas! It’s a time to demonstrate how grateful we are, show our loved ones how much we care, and enjoy a little peace after a busy year. This year we may be reflecting on another hard year – both financially and emotionally, as the pandemic carries on.

But Christmas means we can find some solace with family and hopefully look forward to a more positive 2022. One thing that won’t change much this year, however, is the small stresses that come with the financial impact of Christmas – especially as energy bills are on the rise. Whether it’s buying presents for the kids, a turkey big enough to feed all the family or even the many Christmas parties we must attend, managing your money in December is tricky. We’ve put a short guide together with some tips to help you spread the cost of Christmas.

Money Management Mistakes

  • Impulse gift buying: Christmas shopping should be something to enjoy but setting off unprepared can often lead to overspending or ending up with too many presents.
  • Excluding the accessories: not budgeting for expenses like wrapping paper and Christmas cards can cause your finances to stumble. You can get these extras relatively cheaply, but they do need to be included in the festive budget.
  • Reduce, reuse, recycle Christmas presents: consider limiting the number of presents you buy, reusing ribbon or tissue paper saved throughout the year and recycling presents from last year that you never gifted or never used.
  • Last minute panic buys: leaving your Christmas shopping – both food and presents – until the last minute can cause a huge impact on your finances and may lead to overspending and having to borrow to pay your normal financial commitments.

Spread the Cost and Save this Christmas!

Save throughout the year

The easiest way to spread the cost of Christmas is to start saving early. If you can put a bit of money away in the run up to Christmas, then the impact on your finances won’t be quite so huge for December. It can be easier said than done, especially if you’re already on a budget or trying to save towards other things, but even £10 or £20 every so often will make a difference. If you save £20 a month from January to November, you’ll have at least your Christmas food shop covered!

Shop early

Spreading the cost of Christmas is best started before December. If you’ve got the space – maybe under the bed or in the loft? – you can start your Christmas gift collection as early as January! If you buy Christmas presents throughout the year, you’ll automatically have less to do in December because the hard work is already done. Plus, you can take advantage of all the sales throughout the year. If this sounds like something you might take up, remember to keep a list! There’s no point buying early if you forget what you’ve bought and purchase other presents later in the year.

Last Year’s Gifts

Okay, we know it sounds cheap, but recycling presents you won’t use or don’t like is far better than letting them go to waste. If you feel bad passing your presents on (or you’ve forgotten who gave them to you and you don’t want to risk giving them back) then consider selling the items online instead. One man’s trash is another man’s treasure. Not only will you get rid of the presents you’re not going to use, but you’ll also make a little cash to put towards this year’s Christmas shopping.

Don’t go over the top!

It’s a challenge, we know. Sometimes you just can’t help spoiling your loved ones, especially when they deserve it. But it doesn’t mean you have to go over the top for everyone – we think that one thoughtful gift is worth a thousand general ones. Has anyone dropped any hints? Maybe your best friend’s favourite jumper bit the dust this year or your pregnant neighbour is a little stressed and could do with a nice pamper set. Whatever it is, you don’t need to go overboard to show someone you care. It might be a little harder to be so restrained when it comes to the kids, so think about where you can get their presents a little cheaper. Some supermarkets stock children’s toys so you could always use loyalty points to cut the costs, for example.

Borrowing at Christmas

Christmas tends to increase people’s outgoings and if you haven’t been able to save up throughout the year (or you have but had an emergency cost which needed paying) then borrowing money can seem like a straightforward solution. Whether you’re looking for a quick resolve with payday loans or a longer term credit facility like a credit card, consider how the repayments will affect your usual budget after Christmas. January can be a financially challenging month anyway, plus with the cost of energy increasing, many people will find their essential expenditure is higher than normal. Before borrowing, create an accurate budget to ensure you can afford the repayments. Using credit may help temporarily, but it’s only money that will need repaying at a later date!

General Suggestions for Keeping Christmas Costs Low

Money management comes easy to those who make a habit of it. Practising little things daily can help adapt your mindset to think of saving as a necessity rather than a luxury that only those with high incomes can afford to do. The more you try to save and put money away, the easier it becomes. Having savings also means that you won’t need to take out credit to cover unexpected expenses which results in cheaper solutions to surprise costs because you won’t have to pay any interest. Small habits can make a big difference, and if you practise saving money and cutting down costs throughout the year, it’ll be a piece of (Christmas!) cake by the time December rolls around.

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