Experts give their tips for Christmas budgeting and stress now is the time to start tackling your festive finances.
It might seem too early to be thinking about Christmas, but with less than 100 days to go until the big day, now is the time to start addressing your family’s festive finances.
New research by the Action for Children (actionforchildren.org.uk) charity has found 71% of families that applied for help from its Coronavirus Emergency Fund had never asked for any financial aid before, showing the pandemic has hit many families hard – so sensible festive budgeting is more necessary than ever this year.
“Christmas can be a hugely expensive time, not to mention stressful, for parents, as demands for the latest toys, gadgets and games come in thick and fast,” says Jo Thurston, an Action for Children Parent Talk advisor (parents.actionforchildren.org.uk).
“And that’s before you start adding up those extra foodie supplies, the decorations and presents.
“This year, with family finances still reeling from the impact of Covid-19, winter may be looking bleak and we’re already hearing from parents who are starting to feel stressed about the pressure to spend at Christmas.
“This is why it’s essential to start planning now. – even small changes today may make things a little easier and less stressful when December arrives.”
And Jo Harris, head of Barclays Money Mentors (barclays.co.uk/money-mentors), adds: “After such a challenging time, families will no doubt be looking forward to making Christmas extra special this year. With many on a tighter budget due to the financial implications of the global pandemic, savvy ways to celebrate the festive period have never been more welcome.”
She continues: “With less than 100 days to go until the big day, you’ve got time on your side, too – there are lots of ways to ensure both you and your wallet can enjoy some festive cheer.”
Here are their tips for making sure Christmas isn’t too costly this year…
1. Budget now
Start an action plan to work out the money you have coming in and going out every month, suggests Thurston. Go old-school with pen and paper or use any of the easily available budgeting apps. You can download specific Christmas apps such as Christmas List, or ideally get yourself an all-rounder such as Yolt Money & Budget Manager. “That way you can make sure budgeting becomes a habit for life and not just for Christmas,” she says.
When budgeting, Thurston advises families not to underestimate, and be as detailed and honest as possible. “A good rule is to divide out your income,” she says. “Essential costs are your priority, so put money aside for those first. Whatever you have left, split into weekly spending amounts – it’s easier to manage smaller numbers and you’ll also be more aware when it’s running low.”
Once your budget is up and running, update it monthly and keep a tab on daily spending, she advises.
2. Start stocking the freezer
One of the biggest Christmas costs can be food, says Harris, so spread the cost by looking out for food with a long shelf life now, or food you can freeze in the months leading up to Christmas.
3. Make the most of your money
If you do have some money left in your budget, use it to start your Christmas savings pot, suggests Thurston. If you don’t have any spare, either look at ways of increasing your income or where you can cut down on your current spending.
Are there benefits or financial support you could be claiming – Turn2Us (turn2us.org.uk) has a benefits checker that can help you find out. Have you a spare room to let? Can you sell items online to declutter and raise Christmas cash? Get into the habit of comparing prices, not just on groceries but on bills. Become a coupon king or queen and always search online for discount codes or vouchers you can use for family activities.
4. Take advantage of deals
It may be tempting to use your favourite brands for festive goods, but Harris says taking advantage of available deals can save a lot of money. “Most supermarkets start advertising 2-for-1 offers on the Christmas basics months in advance,” she says, “so make sure to look out for them in the run up to the festive period.”
5. Get creative
Even empty wine bottles can be transformed into decorative pieces, either as elegant candle holders, or decorated with fabric to look like Santa Claus. To dress a table, bring the outdoors in for a fresh look that doesn’t cost the earth – pine cones, holly, mistletoe and driftwood should all be readily available during the winter, so get foraging outdoors!
6. Go digital
Instead of sending paper cards, keep costs down by sending friends and family free e-Christmas cards from the internet, Harris suggests. “After all, it’s the thought that counts!” she points out.
7. Get the whole family involved
It gives kids a great financial head start in life if they can see how you’re making your money work harder, Thurston says. “Ask them to spot cheaper items in the supermarket or what toys, books and games they no longer play with that could be passed on to another family and earn them some money.”
8. Don’t fund fads
Parents can feel pressure to buy into the latest – and often very expensive – trends around children’s toys and gadgets, only to find they’ve gone out of fashion within a few weeks, Harris points out. “Encourage your child to start pulling together their Christmas list a little bit ahead of time and see which items stay front of their festive wish list, and which are more a passing whim,” she suggests.
9. Introduce Secret Santa
Secret Santa is a great way to cut some of the cost of presents in your family group, says Harris. “Buying for just one person means you can put more time, thought and money into one fantastic present, rather than stretching yourself to buy something for everyone.” Agree a strict budget with everyone taking part, and if you’re stuck for inspiration, consider making a gift wish list that people can feed into.
10. Don’t ignore money worries
Don’t bury your head in the sand but reach out and talk to someone, advises Thurston. “Fretting about cash can cause people sleepless nights and even lead to family conflict,” she says. “The earlier you face up to issues such as debt, the sooner you can start tackling them.” She suggests chatting to a Parent Talk advisor, or visiting the Money Advice Service (moneyadviceservice.org.uk/en) website for help.
Picture credit: istock/PA.