Yep, we realise we’ve dropped the C bomb in June, mathematically the furthest possible time away from Christmases both past and future, but sometimes, it pays to play the long game.
Indeed, when the subject matter is saving money on your yuletide spending, and the cost of living crisis is still very much in play, it suddenly feels fiscally responsible to approach the festive season with this level of foresight.
The Christmas period can be synonymous with overspending and financial stress. With gifts, decorations, food, and social events, it’s easy to see why so many people find themselves struggling to maintain a healthy bank balance during the holiday season.
But fear not! There are plenty of practical tips and tricks out there to help you avoid Christmas taking a major toll on your bank balance, helping you enjoy the festivities without the financial hangover come January.
Set A Budget & Stick To It
The first step to avoiding overspending during the festive season is to create a realistic budget. Setting a Christmas budget is, in our mind, a five step process:
- Evaluate your financial standing: Begin by taking an honest look at your income, savings, and monthly expenses. It’s crucial to allocate funds for necessary expenditures, such as housing, utilities, and food, before considering your Christmas budget.
- Set a limit: Once you’ve ascertained your disposable income, decide the maximum amount you’re comfortable spending on Christmas-related expenses—including gifts, decorations, food, and travel. Keep in mind that overspending can lead to stress and financial issues in the future, so adhere to your designated limit.
- Make a list of recipients: To prevent impulse spending and ensure everyone is accounted for, write down the names of everyone you plan to give a gift. Don’t forget to include immediate family, extended relatives, friends, and coworkers, as appropriate.
- Allocate funds for each recipient: Assign a specific budget for each individual on your list, taking into account their relationship, preferences, and your unique financial circumstances. It’s important to be realistic and not exceed the overall budget you’ve set for Christmas spending.
- Factoring in additional expenses: After allocating funds for gifts, factor in other festive expenses. These may include items such as decorations, holiday events, charitable donations, travel costs, and entertaining. Allocate funds for each category and stick to these amounts.
Start Saving Early
One of the best ways to avoid financial stress during Christmas is to start saving money well in advance. Setting aside a small amount each month throughout the year can make a significant difference when it comes to covering your festive expenses. Consider opening a dedicated savings account or using a budgeting app to help you stay on track.
Here are some popular budget apps that can help you manage your Christmas spending:
- Emma: Emma is a budgeting and savings app designed to help you manage your finances by tracking spending, categorising transactions, and providing budgeting insights. It also has a handy feature to help you avoid overspending during the Christmas season.
- Money Dashboard: Money Dashboard allows you to connect your bank accounts and credit cards to get a clear picture of your spending patterns. You can create separate budgets for Christmas gifts, food, and other expenses, and track your progress towards your goals.
- Cleo: Cleo is an AI-powered budget assistant that helps you track your spending and set budget goals. By connecting your bank accounts and initiating conversations with Cleo, it can provide personalised insights and suggestions on how to save for Christmas.
- PocketGuard: PocketGuard helps you manage your finances by connecting your accounts, tracking your budget, and identifying areas where you might be overspending. You can set up a dedicated Christmas budget within the app to help stay on track during the season.
- Monzo: If you’re a Monzo customer, then the UK-based digital bank that also offers budgeting and expense tracking features. You can create a dedicated “pot” for your Christmas spending, set a budget, and track your expenses in real-time.
- Squirrel: Squirrel is an app that helps you budget, save, and track your spending. It separates your bill money from your spending money to ensure you don’t overspend during the holiday season.
Shop Smart
When it comes to gift shopping, it pays to be strategic. Look out for sales and discounts throughout the year, particularly during Black Friday and Cyber Monday. Additionally, consider using cashback websites and loyalty schemes to earn rewards on your purchases and make some serious Christmas savings.
Don’t forget to compare prices online before making a purchase to ensure you’re getting the best deal possible. These platforms are particularly extensive when it comes to comparing high street prices in the UK to save money on your Christmas shopping:
- PriceRunner: PriceRunner is a comprehensive UK-based comparison site that allows users to compare prices on a wide range of products from high street retailers as well as online stores. The site not only includes the latest deals but also offers user ratings and reviews to help make more informed decisions when shopping for Christmas presents.
- Idealo: Idealo is another popular UK price comparison platform that helps users find the best prices for a variety of products, including electronics, home appliances, toys, and more. Idealo compares prices from both high street and online retailers, providing a simple way to find the best deal on whatever items you’re looking to purchase for Christmas.
- Kelkoo: Kelkoo is an additional UK price comparison platform that assists users in finding the best deals on a diverse range of products for Christmas shopping. This platform compares prices from both high street and online retailers, offering a user-friendly interface and comprehensive search options. From electronics and toys to fashion and home appliances, Kelkoo helps shoppers make informed decisions on their purchases while ensuring they find the most competitive prices.
Embrace DIY & Homemade Gifts
A thoughtful, homemade gift can be just as meaningful (if not more so) than an expensive store-bought item. Consider creating personalised presents for your loved ones, such as baked goods, handmade crafts, or even a heartfelt letter. Not only will this save you money, but it also adds a personal touch that’s sure to be appreciated.
One heartwarming suggestion is to create personalised ornaments that encapsulate special memories; a small wooden block could be adorned with a family photo, inspiring quote, or painted design that captures the recipient’s unique personality.
For those who enjoy cosy winter nights, consider knitting or crocheting a custom scarf or pair of socks in their favourite colours as a thoughtful, functional offering. Another option is handcrafting scented candles or soaps, infused with the giftee’s preferred fragrances, making each use a reminder of your special bond.
Lastly, homemade food items such as jam, flavoured salts, or hot cocoa mix can delight taste buds while conveying the warmth of your care and dedication. Whichever DIY gift you choose, the thought, effort, and love invested will undoubtedly make it a cherishable Christmas treasure.
Plan Ahead For Food Expenses
Food is often one of the biggest expenses during the Christmas period. To avoid overspending, plan your meals in advance and make a shopping list before hitting the supermarket.
Opt for seasonal produce and look out for special offers on non-perishable items that can be bought in bulk. Don’t be afraid to get creative with leftovers – there are plenty of delicious recipes out there that can help you turn yesterday’s feast into today’s treat.
Read: The best Christmas dinner cooking tips
Organise Low-Cost Festive Activities
There’s no need to break the bank when it comes to enjoying festive activities with friends and family. Instead of expensive outings, consider organising a potluck dinner, hosting a Christmas film night, or going for a winter walk in your local park. Remember, the most important aspect of the holiday season is spending time with your loved ones, not how much you spend on entertainment.
Communicate With Friends & Family
Finally, don’t be afraid to have open conversations with your friends and family about your financial situation. If you’re struggling to afford gifts for everyone, suggest alternative arrangements such as Secret Santa, where each person buys a gift for one other person within a set budget. Alternatively, you could agree to focus on experiences rather than material items, creating lasting memories without the hefty price tag.
The Bottom Line
It’s eminently possible to enjoy a festive and financially stress-free Christmas. Remember, the true spirit of the season lies in spending quality time with your loved ones, not in the amount you spend on gifts and activities. So, go ahead and embrace the festivities without worrying about the impact on your bank balance. Happy holidays – in 193 sleeps, that is!