With December fast approaching, you may already feel like your Christmas spending is spiralling out of control.
While overindulgence is practically synonymous with the holidays, it’s difficult to let go and enjoy it if you’ve been battling the rising cost of living all year long.
So, if your budget’s a little tighter this year, we’ve got five expert tips to help you make the most of the festive season.
Create a detailed spending forecast
Without a team of elves to take care of the preparation, it’s down to you to put in the work. Grab a pen (or open a spreadsheet or budgeting app) and note down all your upcoming expenses. Put them into categories and set a spending cap for each.
For example, you might have separate limits for: food and drink, gifts, decorations, cards and wrapping, festive socialising, and last-minute contingencies.
You can create your forecast in one of two ways:
- List your categories and estimate how much you’ll spend on each, then add up the categories and see what you might need to cut back on
- Set your total available budget based on what you have available, and divide it between the categories, in priority order
If money’s quite tight, it’s wiser to adopt the slightly stricter second approach – similar to a zero-based budgeting system.
You might even decide to skip some categories completely; a few more radical ideas include a gift-free Christmas, a booze-free Christmas, or a zero-waste Christmas.
If you can, hold back a small emergency amount.
Scale back on gifts
Think like Santa: make a list of everyone you’re giving a gift to (and how much you’ll spend), then check it twice to see who you can remove or what you can reduce.
There are many ways to scale back without causing offence or upset:
- Establish a ‘no gifts’ policy with friends or family
- Agree to give only homemade or second-hand gifts this year
- Draw names from a hat so everyone gets one gift
- Give acts of service or quality time rather than physical items
- Set clear parameters for children on what they can expect
Be strict with your spending limits, as it’s all too easy to overspend by a few pounds per person – ending up significantly over budget across the board.
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We all have overspending triggers: perhaps it’s social pressure to not seem cheap, or guilt over not being able to spoil your loved ones.
Try to remove a little emotion from your shopping process and stick to the list.
Set yourself a shopping deadline
We’re often more prone to impulse spending as December progresses, and as the last-minute panic sets in, prices tend to climb – and so do delivery charges, along with the stress of whether it’ll arrive on time.
The best way to avoid this is to get your shopping done early and stop when everything’s ticked off your list.
Setting yourself a firm deadline around mid-month will force you to assess if any purchases after this date are truly necessary.
There’s bound to be an item or two you decide you do really need, so it also helps to hold back a little money specifically for post-deadline purchases.
Get cashback where you can
If you’re looking for an easy way to cut 5 per cent off your total spending, there’s still time to apply for a cashback credit card.
One example is the Amex Everyday Credit Card, which offers 5 per cent cashback for five months (up to £125) – though always check it’s right for your circumstances and remember how credit card debt can build up.
Or if you’d prefer not to take out credit for Christmas, creating an account with a cashback site like Topcashback or Quidco can provide varying levels of cashback at different retailers.
Some individual bank apps also do this automatically when you use their card, like Monzo, while apps like Airtime might also help you save along the way as you spend.
It may only be a fraction of your total, but you’ll be grateful when you get the money back next year.
Focus on free experiences
At this point, you may feel like Christmas is going to be nothing but cutbacks and sacrifices.
It’s good to remember, therefore, that gifts and food are only a small part of the big day.
Many of the best bits – particularly for children – involve little or no spending, like:
- Snuggling up under a blanket to watch a Christmas movie
- Taking a walk around a neighbourhood with beautiful lights and decorations
- Preparing a few traditional treats, like mince pies or gingerbread men
- Getting crafty with handmade decorations, like paper chains
- Going carolling, or putting on a playlist of your favourite Christmas tunes
- Visiting a major shopping street to see the festive window displays
Festive memories are far more likely to be experiences than material things, so try to keep your focus on the real magic of the season.
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