Christmas can be a challening time of year for managing our money, and this year it may be even more difficult to get the balance of spending and income right. If this is true for you, this excellent blog from Young Money may be of help.
Christmas is now less than one month away! This can be a joyous but undoubtedly expensive time of year. Parties, presents, travel, food…and that’s before you get to New Year’s Eve!
So how on earth can you make your money last? The key to enjoying it all without a January debt hangover is to make (and stick to) your own Christmas Budget. It also helps to save up what you can, plan ahead and be a bit clever when it comes to entertaining and presents.
Oh, and just say “no” a bit more – it won’t make you a Scrooge, I promise!
Let me explain how all this works in my guide to keeping Christmas affordably amazing.
Figure out the magic number in your Christmas budget
Firstly, ask yourself: how much will Christmas actually cost this year? A good benchmark is your spending last December. Think about whether you had enough money, where you overspent and where the pinch points came – e.g. your workplace Christmas party. Tot up your spending in each category: food, drink, travel, presents, decorations and entertainment. Don’t forget to add in any new commitments this year – maybe you’re hosting Christmas dinner for the first time. Then add it all up to get your magic number. THAT, my friend, is the basis for your Christmas budget. Now you can start to make some decisions…
Save more, spend wisely
A Christmas (and NYE) savings fund can be a lifesaver. Divide your magic number into a weekly or daily sum that you can put into an easy access savings pot. You can make some short-term adjustments to your daily spending – fewer take-out coffees and more nights in – so you can put away more. But you may find there’s still a gap. That’s why you need to start next year’s Christmas savings fund as soon as you take down the tree in January. It sounds crazy but think about it: it’s far better to build up a fund slowly with small amounts over the year than borrow or over-save frantically in late Autumn. Your Christmas budget can’t create money from thin air! But for now, you need to get organised.
Make your plans
Book your trains as soon as possible if you’re travelling: look into split-ticketing or getting a discount on off-peak railway journeys with a Young Person’s or Millennial railcard. Stock up on essential food and drink while it’s still available at a competitive price. It’s surprising how much you can freeze in advance and use in delicious leftovers post-Christmas. Have a look through your cupboards to see if there are any ingredients, like stock cubes or old mulled wine sachets, you can use up. This way, you’re not busting your Christmas budget before you get to presents. Speaking of which…
Devise a present pyramid
The answer to all your present conundrums is my present pyramid™! At the top of your pyramid are the handful of people who get the most ‘special’ presents. As you go further down, more people who you know less well should receive lower-value presents until you get to the bottom, where a card or secret Santa will do. The overall value of presents within the pyramid should fit the total amount you can afford to spend. It sounds brutal but nobody needs to know about your pyramid and it’s a brilliant way to make sure you spend your present budget in a fair and proportionate way. An alternative present idea is to make vouchers for your time, like a spring picnic, film night or special home-made dinner.
Upcycle and get creative
Whenever you receive a nice gift, wine bottle or shopping bag, use it for Christmas presents. You can always use Christmas labels to cover up the logos. Likewise, hang onto any tissue paper, plain cardboard, decorative paper or ribbons from purchases. Take last year’s Christmas cards, cut them up and use them either for new cards or gift tags this year. You can even salvage and reuse wrapping paper if you carefully open your presents! Upcycling cards, wrapping paper and gift bags doesn’t just save you money: it’s far better for the environment too. That’s why you should hold always hold onto Christmas decorations for as long as possible (or at least check out your local charity shops for bargains).
Just say "no" more
Ultimately, having a great Christmas isn’t about spending lots of money. It should be about recharging and spending time with people you love. That means letting go of unrealistic expectations and setting some boundaries. Those expensive drinks with people you barely know? Give yourself permission to say no. Hosting your entire extended family for Christmas dinner? If the cost falls totally on you, that’s just not fair. Make sure your partner, close family or flat-mates are contributing their fair share to the Christmas budget. Above all, resolve to enjoy yourself – and take those ridiculous Christmas adverts with a pinch of salt! I know I will…
Have a lovely Christmas (and New Year) when it comes!