The countdown begins: budgeting for Christmas
Christmas is on the horizon! The wonderful time of year to eat, drink and be merry. Looking forward to time with family and friends, great presents and festive revelry is a great way to keep spirits up as the days get shorter and colder. It’s even better when you don’t have money worries on the mind!
From buying gifts and Christmas food, through to paying for those taxis home and the festive cocktails, there is no doubt that the season of goodwill can leave you worried about your finances! However, if you start your planning now, there is no reason to worry about your bills in January. Get prepared, get a strategy in place and get ready to enjoy Christmas to the max, without bankrupting yourself in the process! Our guide will get you started.
1. Adopt the right frame of mind
A fantastic Christmas has very little to do with how much money you spend. Your loved ones won’t love you more for splashing lots of cash on them – but they will appreciate carefully chosen and thoughtful gifts. Equally, you don’t have to buy a new outfit for every Christmas do you attend – the mulled wine will still taste just as sweet even if you are recycling last year’s little black dress! Start to identify potential big cost areas and think ahead about how you could avoid or lessen those costs by thinking in a smart way.
2. Start shopping now
The pre-Christmas frenzy is an invitation to over-spend, as everything becomes frenetic and overly exciting. So, start now by creating a list of everyone that you will need to buy a gift for, and set a budget. Then, start to sign up for newsletters at your favourite online stores (they often welcome you with a discount) and keep your eye out for special offers. They will start to flow through as the main Christmas shopping season begins. By beginning to buy now, you will also have a chance to spread out the cost over a couple of months.
3. Be creative
Can you make some Christmas gifts this year? There are so many fantastic tutorials online for baking, crafting and DIY and you still have plenty of time. Pinterest is a fantastic place to start and get inspiration for homemade gifts and treats to share. Ditto, do you need to buy expensive ready-made Christmas food, or can you learn some new recipes and cook from scratch? One of the best ways to spend less is to learn new skills – rather than effectively pay someone else to deliver them for you!
4. Sort out any debts beforehand
If you are using an expensive credit card, then assess your options for a better deal. Look at a zero percent card or a balance transfer card at a low rate. There are some great deals about and these are invariably better than using an expensive overdraft or legacy card. Check out your credit report first so that you know how eligible you are likely to be for new credit. If you do take out a card, then be very careful that you pay it back on time. If your credit score is good and you pay off your card in full each month, you might also want to look at cashback cards. Remember too that purchases over £100 on a credit card have extra protection – well worthwhile as a consumer.
5. Speaking of cashback…
6. Make use of vouchers, points and rewards
Now is also a great time to check your supermarket reward cards to see if you have amassed a balance – which you can then spend on your festive treats without having to raid your ‘real’ cash!
There is no doubt that January is a long, cold month – both when it comes to the weather and your finances! So, budget ahead now and allocate some money over the next three months into a savings pot. You can use this to enjoy the January sales or to pay off a larger credit card bill. Use online banking and smartphone apps to track your spending, and consider keeping a spending diary if you really want to keep a close track on your outgoings.
Consider how you can lower your bills beforehand by adopting smart grocery buying tactics (drop brands and shop with a list), walking more instead of driving (and cut your gym membership accordingly), renegotiating on utility contracts and searching for better deals on your financial products. You might also want to consider switching bank accounts to one offering a welcome bonus – for example, a number of banks offer £100 bonuses for switching.
It is also well worthwhile looking at ways to earn a little extra money on the side to get you through Christmas and January and the so-called ‘gig economy‘ has plenty of easy ways to do this. Yes, the money isn’t big, but if you can start to bring in some extra – or make money from a hobby – then you will have a useful additional source of income, and a potential future direction to mull over in the new year!
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