01 December 2016

Festive finances, sorted

Whether you celebrate Christmas, Chanukah, or just the excitement of the festive season, December can be a financial crunch point for many of us. Buying gifts, attending parties, preparing lavish meals and travelling to be with friends and family can all put an extra strain on your wallet at this time of year. And you can guarantee there’ll be a few unexpected expenses along the way too.

Planning ahead, even if you’ve left it a bit late, is the key to getting through the winter without falling prey to festive panic. Here are some ideas for preparing yourself for the holiday season so you can be cool, calm and Christmassy when the time comes.

Planning and budgeting

Money Advice Service puts the average cost of a household Christmas at £500, which includes presents, food, travel costs and decorations.

To figure out your own Christmas costs, it’s a good idea to break everything down into a budget. Look at your income and outgoings to see how much you can spend on the things that make up your Christmas.

Think about how much of your budget should go on food, decorations and entertainment, and whether there are any travel costs that need to be covered. Is it more important to have a beautifully decorated home with bags of festive atmosphere, or is your Christmas dinner a big priority? Would you rather spend more on presents, or offer to help out relatives with travel costs?

Decide what type of presents you want to give and who you will buy for. Remember, materials for home-made presents cost money too, even if they’re much cheaper than buying.

Taking stock

Before the Christmas rush begins, take an overall look at your finances. Are there any bills you need to pay? What about credit cards and repayments? Have you left yourself a bit of a rainy day fund for unexpected costs? It can be tricky to keep track of things with the organisation of Christmas thrown into the mix.

Reviewing money matters ahead of your Christmas shopping could give you a clear picture of your long-term finances, so you’re not left with unmanageable repayments in the new year. One way that could help is to consider setting up an arranged overdraft. That way (as long as you’re eligible for one) you have a buffer if you do need to borrow a little extra cash, but it won’t cost a penny if you don’t use it.

Or, if you have existing debts that need to be paid off, think about consolidating them into a single personal loan. This can make life simpler, as it means you’re dealing with just one interest rate and one repayment schedule. You can also talk to your personal loan provider about arranging the loan term to make sure repayments are affordable.

Cutting costs and keeping your budget on track

Here are a few ideas for keeping your Christmas costs down and generating some extra spending money.


  • Look at cheaper ways of having fun at Christmas

Making your own decorations (with the help of the kids) or revamping a previous year’s outfit for festive parties are all worth considering.


  • Customise your Christmas dinner 

If you don’t have a big crowd coming for dinner, why not swap the traditional turkey for chicken, or go ‘Christmas lite’ with a turkey crown? Or for vegetarians, a cheesy bake with seasonal vegetables is warming, filling and cheap to make. Replace store-bought Christmas pudding with a home-made cake, and you can even add the traditional silver sixpence (or 50p piece, sterilised in boiling water) after it’s cooked. 


  • Get creative with crackers

If Christmas crackers are a must-have, buy the cheapest available and add your own items to them, like favourite sweets, trinkets from around the house or funny messages. 


  • Swap standard gifting for Secret Santa

If you have a lot of friends to buy for but not much of a budget, how about organising a Secret Santa party? Pick names from a hat and then meet to exchange gifts. With a budget of £10 and only one person to buy for, you can save money without compromising on enjoyment. 


  • Have a pre-Christmas cutback 

Put some cash back in your pocket by economising on groceries, treats, and extras like takeaways and meals out. It will make the big day feel all the more luxurious when the time comes.

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