Budget for Christmas
Cost of Living: How to do Christmas on a budget
With inflation currently topping 11%, prices in late 2022 are a lot higher than last December, which means this Christmas is going to come at a much bigger cost.
Avoiding your bank account becoming as red as Rudolph’s nose means being sensible and cutting down on unnecessary spending, especially if the cost of living crisis is biting hard. The truth is the best Christmas doesn’t come from splashing out on the most expensive presents or food, but from being with loved ones.
Agree limits with friends and family
- Limit presents to immediate family, children and close friends and agree to reduce the cost of gifts – set a £5 or £10 limit, for instance. It may be hard to raise the issue, but loved ones should be understanding about money pressures and happy to help.
- Think it’s hard to buy a lovely gift for a fiver or less? Try a charity shop. There are some great gems to be found that can be given as they are, or after being ‘upcycled’ for a personal touch. Or give an experience. You could plan a day out for everyone in better weather and leave them all with great memories. Or offer to babysit or cook them a meal — there are all sorts of creative ways to give your time which can be really appreciated.
- When it comes to entertaining, agree to share the cost of food and drink by asking people to bring different courses or drinks, which can actually be a lot fun. Or pre-agree an amount to be spent and ask everyone to chip in. This is not needless penny-pinching; it’s sensible sharing in tough times.
- When spending it’s important to work out how much you can actually afford for Christmas and stick to that, especially if you have not been able to save much during the year. Have a set amount for presents and another for entertaining. Planning carefully will help avoid busting your budget, and calculating the cost before you start spending will help you to spot where you may need to reign in unaffordable generosity. By carefully controlling your spending at Christmas you’ll be getting a head start on your finances for 2023.
- Meanwhile, with the absence of a Good King Wenceslas to help you cover the cost of your winter fuel, energy bills — along with food — are likely to make the biggest dent in your bank account this winter. So keeping to rules about heating and lighting to make energy more economical is sound sense. Get kids involved with turning off lights or unused electrical items, too, by making a game of it and handing out a small prize for whoever is most energy-wise.
- The underlying message is Christmas is about togetherness and fun. Approach it by turning back the clock by using a simple pack of cards or pencil and paper games, rather than buying the latest expensive new toys. Cards or games like charades can be the source of many hours of happy entertainment. And doing that, I promise you, will bring people closer together than fancy gifts or expensive grub that might not all get eaten.
Look for vouchers, discount codes and cashback
When you’re shopping online, take a moment to search for voucher codes. A lot of retailers will offer you a pop-up discount the first time you shop with them, particularly if you leave items in your basket for a while.
Put thought into stocking fillers
Joke presents can be fun but nobody needs more plastic clutter. If you’re buying secret Santa presents or stocking fillers, consider more thoughtful gifts like a donation to a charity in someone’s name, or even something that’s actually useful and won’t be thrown out in January. You might be surprised at what gems you can find for £5 in a charity shop.
