How to do Christmas on a Budget
With inflation at a 40-year high, many of us will be looking at our receipts with alarm after going to the supermarket.
And with good reason too. According to the Office for National Statistics, the price of low-cost everyday items went up by 17 per cent in the year to September 2022. Many kitchen staples have gone up by a much higher amount, with the price of vegetable oil rising by 65 per cent, pasta by 60 per cent and tea by 46 per cent.
So naturally, many of us are wondering how to afford all the indulgences we enjoy over the festive period, or at least, how to avoid paying over the odds if we can help it.
Here are a few handy tips for keeping the lid on your spending this Christmas.
Set a budget and stick to it
It’s so easy to overspend as you buy Christmas food, drinks, gifts and decorations, but as high inflation bites and costs soar, that could put you at greater risk of falling into the red.
With that in mind, it’s important to set a Christmas budget, so you know exactly how much you are able to and want to spend.
To help you calculate your budget, start by working out how many people you’ll be buying Christmas presents for and cooking for over the festive season.
Write a Christmas list
Once you’ve set yourself a budget, write a list of what you plan to buy, from your Christmas turkey to gifts for your loved ones.
By planning what you’re going to buy in advance, you’ll be less likely to buy items on impulse as you browse in the shops, and you can tick off each item as the big day draws closer.
Don’t get into debt
It can be easy to rely on credit cards and short-term loans, but that can lead to you falling into debt and paying more in the long run. And if you struggle with repaying these debts, your credit score could be negatively impacted. So it’s important to make sure you only spend within your means.
Don’t dip into your savings
It can be tempting to fall back on your savings if you’re struggling, but that can ultimately be counterproductive, and make you less likely to achieve your long-term financial goals.
A viable alternative might be creating a separate pot of money specifically for Christmas spending, where you can put money throughout the year so it’s available to you over the festive season.
Don’t buy Christmas presents at the last minute
Christmas isn’t a movable date, so there’s no reason to wait until December before you start buying Christmas presents and food. By starting earlier, you can spread out the cost of the festive season, which can significantly lessen the financial pressure.
Research the market
Shop around for the best prices, both online and in physical stores, as the cost of certain items will vary depending on where you look. With that in mind, it’s important to resist temptation on key shopping days like Black Friday and Cyber Monday. Just because something is being advertised as a great deal, it doesn’t mean you can’t still find a better deal elsewhere or at a different time of year, if you take the time to look.
Don’t ignore your day-to-day expenses
As you set your Christmas budget or put money in a Christmas spending pot throughout the year, don’t overlook your regular costs and outgoings, from mortgage payments and car insurance to utility bills and groceries. Setting a budget for the festive season involves balancing your various financial obligations so you start the new year in a good place. This means it’s vital not to lose sight of those day-to-day commitments alongside your more exciting Christmas spending plans.