Posted on: 11 December 2020
Sadly, many of us will be having a smaller Christmas this year, but one upside is it might be less expensive than usual. Use these top tips to reduce the financial stress and avoid costs spilling over into January.
Set a budget
First work out what you can afford to spend. The typical UK household spends an extra £800 in December, mainly on food, alcohol and presents. That’s a lot of extra costs to absorb from December’s pay packet, so many end up paying well into the new year.
If you’ve never made a budget before, try reading our article on Budgeting for Beginners. Once created, put your budget somewhere visible like the fridge door to help you stick to it.
Ban unnecessary gifts
Often, we end up swapping gifts with certain people just out of social obligation. It feels a bit pointless if you’re not enjoying the act of gift-giving and receiving back things you don’t need.
Also remember that gift-giving creates an obligation on recipients to give back, whether they can afford it or not. For some, the gift of "not obliging you to buy for me" is actually better.
It might be worth having an honest conversation with people to say that you’re not expecting them to buy you a gift this year and suggesting you just swap cards instead. Make it clear it’s not personal - you’re just trying to be more thoughtful about your spending.
As an alternative, you could try organising a Secret Santa within your family, or group of friends or colleagues. For those who don't know, everyone's name goes into a hat, then you draw out who you're buying for. So you only buy and receive one gift, usually within a spending limit.
These days you don’t even need the hat – an online tool can organise it all for you with a few clicks. One of the slickest is free site Elfster. Just sign up, enter a few details such maximum budget and the date you’ll do the exchange. You can either enter the other people’s emails or cut and paste a sign-up link. You can even set up wishlists so that people end up with a present they love.
Through your employer you may be able to access retail discounts. These allow you to save money on everything from grocery shopping to luxury brands. Many are available as e-vouchers on your mobile phone, making it quick and easy to save while you shop.
Likewise, some employers offer staff the chance to spread the cost of big-ticket items over several months by taking payments directly from your salary. Popular purchases include TVs, phones, gaming systems, tablets and more. Check with your employer to see if they offer this.
If you have presents from last year you’ve never used, there’s no reason not to regift it to a new recipient. If you can’t think of anyone suitable, see if you can sell it on eBay or Facebook Marketplace.
Christmas can be an expensive time of year, but try to be clear with yourself about what you can afford and how to make the best use of your money. After a difficult year, the best gift of all may be just spending time with our loved ones.