Christmas is a magical time for many. It’s difficult not to get excited when you start hearing your favourite Christmas songs everywhere you go, and you think about sharing gifts with your friends and family.
Though, when inflation is high and there is so much market uncertainty, you may be concerned about spending during the festive period.
If you are feeling the financial pressures of Christmas, you aren’t alone. A recent YouGov survey showed that 60% of Brits are likely to spend less this Christmas than they usually would due to the cost of living crisis.
While you may start to feel financially stressed this Christmas, you shouldn’t let this spoil your festive spirit, as there are steps you can take to mitigate these worries.
So, here are some fantastic tips to help you cope with financial pressures this Christmas.
Create a budget and stick to it
Working to a budget could be considered essential at any point throughout the year, though it can be especially beneficial during Christmas time.
Consider setting a separate budget for each member of your family, then factor in any household expenses and non-essential purchases, such as decorations.
When you know roughly how much you’re likely to spend, you can figure out ways to manage your spending. Not only will this give you a clear idea of where your money will be going, but it can also give you more control over how you spend it.
Get creative with your gift-giving
Sometimes, when it comes to giving gifts to your friends and loved ones, it’s the thought that goes into the present that makes it unique.
So, you could try getting creative with your gift-giving this Christmas. For example, you could try making a gift for someone, or get a cheaper but more personalised item, such as a photo album or handmade decorations.
One of the downsides of Christmas is the pressure to spend large sums of money on extravagant presents. In reality, a creative gift may show the receiver how well you know them.
Think twice about using “buy now, pay later” schemes
You may have recently seen that many online retailers now offer a “buy now, pay later” service that allows you to purchase your Christmas presents and pay off the cost in monthly instalments.
While this may seem attractive at first glance, you should ideally think twice before buying your gifts this way.
This is because, if you miss any repayments, you could accrue excess interest due to typically uncompetitive rates.
Even if you do manage to make your repayments on time, you should ask yourself: is it worth getting in debt over something as insignificant as Christmas presents?
After all, having extra debt could weigh heavily on your mind and cause unnecessary stress in the new year.
Keep a close eye out for discounts
This may seem obvious, but keeping your eyes peeled for discounts is another fantastic way to relieve some of the financial pressures of Christmas.
You should ideally look for any discount codes before you purchase an item whenever possible. For example, websites such as Honey allow you to scan the internet for coupons and promotional codes if any are available.
Also, you should try and remain vigilant for any other sales that may appear, either online or instore. For instance, buying your Christmas goods in bulk, such as wrapping paper or cards, could be a way to cut costs.
Change up your Christmas dinner
Christmas dinner is potentially the most exciting part of the festivities. Although you may consider a traditional dinner to be essential, changing things up could be a great way to cut costs and subsequently alleviate stress.
The Express states that the average turkey costs £46.83 this year, which has climbed from £39.84 due to inflation.
There are some delicious beef dishes that still feel festive during Christmas dinner. A beef Wellington, for example, is relatively inexpensive, and if you’re feeling brave, you could even try making your own to cut costs.
Reconsider whether you should use credit cards
When the time comes to buy gifts for your friends and family, you may want to reconsider whether purchasing them on credit cards is a good idea.
While you may be able to afford to pay for things like food and presents on your credit cards, it may just be worth paying for them with cash or a debit card to avoid the stress of piling up debt.
If you do decide to use your credit cards, you should ideally ensure that you pay off any debts as quickly as possible to avoid interest payments accruing. Also, before making purchases on your credit cards, you may want to ensure that you’re receiving cashback so you can make money when you spend.
Start saving for next Christmas early
With all the stress and financial pressures that come with the period, next Christmas may be the last thing on your mind when you’re trying to manage it this year. But, starting to save for next Christmas early could be a great way to build a safety net from day one.
Even saving just £10 a week would net you around £500 by the time next Christmas rolls around. This could not only give you financial peace of mind as next Christmas eventually does come, but also throughout the year as you know the inevitable costs will be somewhat covered.
Speak with a financial planner if you’re stressed
Finally, speaking with a financial planner could help you work through any financial woes you already have, especially during Christmas time.
Indeed, a planner could talk through your finances with you to help manage your spending habits, handle any debt you may have and even assist you through any tough financial decisions you may need to make.
After all, why should you spend your time worrying about your finances when you should be focusing on the enchantment of Christmas?
Get in touch
The financial pressures of Christmas can quickly add up, but you shouldn’t have to go through it alone. If you would like some help managing your finances, please email enquire@london-money.co.uk or call (0207) 808 4120 to find out how we could help.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.