Christmas is a notoriously expensive time of year. To name just a few expenses, there’s the presents, the food and drink, the logs for the fire, and the mince pie and milk for Santa and his reindeers! Of course, this doesn’t include the everyday costs like heating the house when all the family comes to stay or running the oven to cook the Christmas dinner.
In 2022, the average Christmas cost to UK households was £642. In 2020, the Bank of England reported that households will spend £740 more at Christmas compared to normal months. Unfortunately, this increase in seasonal expenditure means that many of us need to turn to debt to fund the additional expenses.
It all adds up, and the cost of Christmas can become overwhelming. Not only can this put a strain on your wallet, but also on your mental health. Nearly 4 in 10 of us say that Christmas is too stressful, which is the complete opposite feeling to what Christmas is meant to evoke.
But there are a few things you can do to ensure you’re not exceeding your financial limits this holiday season, putting your financial and personal wellbeing first.
Talk openly about budgets
It’s easy to fall into the trap of feeling like you have to spend a lot of money on others at Christmas, but this needn’t be the case. Talking openly and honestly about money is a crucial step to taking the financial and emotional stress out of Christmas.
Set time aside to speak with loved ones about ideal budgets. From food to presents, ensure you’re in agreement about how much you can comfortably spend this year. This will ensure everyone is on the same page about Christmas expenditure and that the budget isn’t being stretched unbearably, making for a much more harmonious household.
Try and set a savings goal
For the next couple of weeks, as you think about those last-minute expenses, is there anywhere in your regular spend that you could pull back on? Perhaps swapping café bought coffees for homemade brews, or preparing packed lunches instead of nipping out for a quick sandwich?
For next year, start 2024 with a bang with an ultimate savings goal for next Christmas. You could try the 1p challenge, for example. On the 1 January you save 1p, the 2 January 2p, the 3 January 3p and so on. By the time next Christmas comes around, you could have more than £600 saved!
Shop around for deals
There’s a lot to think about from now until 25 December, so purchasing the first item you see might feel like the easiest way to manage the growing to-do list. However, the first option might not always be the most cost-effective option.
Block out some time to get serious with shopping, whether it’s online or on the high street. Peruse the shops and find the best deal available before you buy. Even just £5 here and there can add up to some serious savings.
Don’t forget, alongside deals, you could also consider signing up for free loyalty programmes with selected retailers and food shops. They could have some brilliant offers that you don’t yet know about.
Ask for advice
We know that understanding how to navigate the expectations of Christmas can be hard, and putting yourself into debt might feel like the easiest way to keep everyone happy – but that shouldn’t be the case.
If you’re not sure how to manage the Christmas expenses this year and it’s getting too much to manage, make sure you talk to someone. That could be places like the Citizen’s Advice Bureau and mental health charities, such as Mind, all of which are equipped to guide you through any worries you might have.
Christmas is a time for health and happiness, a time for being together, a time for caring. It shouldn’t be a time for stress and financial worries. Make sure you’re looking after yourself and your money this festive season.
All of us at Close Finance extend our sincere best wishes for a very merry Christmas.