Christmas is the time of year when it’s easy to spend more than you can afford and, if you have kids, it’s tempting to buy them everything on their Christmas lists. This means that many of us find it a struggle to make ends meet at the start of a new year. Budgeting at Christmas has little appeal when there’s so much fun to be had but it really can make all the difference to how you start the new year.
These are just common sense, but here is a reminder of some simple things you can do to avoid emptying your wallet and maxing out your credit cards.
So easy to say but how many of us actually sit down and take the time to write a list? Whether you prefer handwritten or typed, there are so many apps and journals available to take the dullness out of what can be a bit of a chore. Make yourself a hot chocolate, get cosy and start writing.
How many of us mums remember to include ourselves on the list by the way?
Budgeting at Christmas is key. Just jot down who you intend buying for, what you’re thinking of buying them, and the amount you’re thinking of spending on them. This way it will be easy to see if you are likely to go over budget before you start online shopping or head out to town.
When you have an idea of how much you want to spend on each person, set a budget that you can afford. If you think money is going to be tight, work out where you can cut back on your occasional spending or be ruthless with who really should be on the gift list.
You might also want to talk to your immediate family to agree on an upper financial limit to gifts or perhaps restricting gift-giving, as my sister and I do, to our kids and just giving each other a bottle of wine.
You don’t really need to give gifts to relatives you see once a year, I think and certainly don’t go mad for friends who wouldn’t put themselves out for you. Very often I think we spend out of guilt or in an attempt to win friendship. That very rarely works.
The other thing that can swallow up your cash if you’re not careful is stocking fillers for the kids and pets, as well as advent calendars.
Again, budgeting at Christmas can make all the difference.
The earlier you start putting money towards your budget in the year, the better you’ll feel when it’s time to go Christmas shopping. Yes, Christmas shopping in August can be depressing, but it all helps to avoid being broke during the new year.
It’s also a good idea to have a review of your finances in July to see what other bills are looming and how much realistically you can free up for Christmas.
It’s a cliche but true nevertheless that it is the thought that counts but remember that the smallest amounts can really add up. It’s not just the gift, is it? There’s cards, wrapping paper, gift boxes and bags, postage and even fuel to deliver them in person.
There are always those things that you forget to buy and end up desperately scrabbling around your corner shop at 4 pm on Christmas Eve.
Obtaining a credit account is an option, although you’ll need to proceed with caution because too much credit and particularly defaulting on payments will have a negative on your credit score. This might mean being turned down for important loans in the future – for example, a mortgage.
The question is, can you trust yourself to make all the repayments on time, without incurring compound interest and late payment fees?
You may be able to spread the cost of Christmas by shopping with some of the catalogue stores who offer credit accounts but make sure you know what you are getting into and if the credit is interest-free. Otherwise, the cost of your purchase will be much higher than the advertised price.
Before buying something, compare prices in different stores first to see if you can get it any cheaper. Every little helps, especially at this time of year. Do try to support smaller businesses and your local traders. This year is going to be a tough Christmas trading period for lots of the smaller retailers and crafts folk who are fighting the might of Amazon and the like.
My personal feeling is that if we don’t start to support our local traders then the high street as we know it may well just disappear and, much as I enjoy the convenience of internet shopping, there is nothing like the experience of Christmas shopping in a shop – if you are prepared and sensibly dressed for it that is!
Why not get creative and make some stuff yourself? This will save you a ton of money, and people will appreciate the thought and effort you’ve put into their gifts a lot more. You could make a food hamper, pamper hamper, cupcakes, a canvas, or anything else you can think of.
I think it’s fair to say that charities have had as tough a year as the retailers and my personal preference is to support the smaller, local charities where I can see that my donations are actually making a difference.
If you want to give a gift to someone who has everything and is a supporter of a particular charity, why not give to charity in their name? Of course, there are plenty of charity Christmas cards but I find that more and more of us are relying on email and texts. It’s not the same, though, is it?
I hope these tips will serve as a useful reminder that, with a bit of planning and budgeting, you can take control of your Christmas spending and avoid the stress of wondering when the credit card bills and email reminders will start appearing.
And don’t forget that you deserve a gift too – if it’s only some time out for pampering and whatever form of self-care works for you.