Let’s face it: December can be expensive! What with work parties, social gatherings with friends and neighbours, gifts, special dinners and New Year celebrations, festive spending can rack up a significant cost if not managed carefully. And, of course, after a couple of restricted years, we are all keen to make the most of our time with loved ones.
But in a time of increased cost of living, how can we make sure we are spending wisely, without losing control of our budget?
In this article, we’ll run through five top tips to help you approach festive spending wisely so you get through the holidays with your financial wellbeing intact!
5 easy ways to manage festive spending
1. Make a short-term plan
It’s never too early to start planning for the holiday period. Work out what your essentials are; these might differ from person to person. For example, is a whole turkey a non-negotiable for the Christmas table? Is New Year’s Eve the highlight of your calendar? Prioritise what you absolutely need, before thinking about what you might also want in an ideal world.
It can also be important to set your budget for the month. Reviewing your spending using either your bank statements or an open banking tool like Maji can help you identify any slack in your budget that you could put towards the extra costs, if you haven’t been able to save up prior to December. That can give you a clear spending limit, so you don’t end up going into debt.
2. Set up clear limits
If you know you’ll struggle with sticking to your limits, pre-paying could be an option to consider. For example, most major supermarkets allow you to purchase a gift card, which you could load with your food spending limit. When your card runs out, shopping stops!
You could also use a bank account with the ability to segment your cash into ‘pots’, ‘jars’, or individual sub-accounts. Newer providers like Revolut or Monzo have this capability, or you could use a specifically designed account like Hyperjar. If it’s too much to open a new bank account, you could even try ‘cash stuffing’: dividing physical cash between real envelopes (although be aware of security when keeping large amounts of cash in your home).
3. Look for deals
If you are open to starting your shopping early, you might be able to nab a few bargains. Purchasing gifts while signed into a cashback site like TopCashback or Quidco can give you back a certain percentage of the price of items purchased from partner brands. On a smaller level, apps like Shopmium give discounts and cashback on particular food items.
Of course, Black Friday and Cyber Monday deals are now everywhere. These are two massive events in the world of shopping, because they mark the point at which most people start considering gift-buying. There are some great bargains to be found, but it’s worth pausing before you purchase. Don’t spend more than you otherwise would, just because there’s a discount! Make sure you shop around and use cashback sites if possible. Having a clear limit and plan for what you’re buying can really help prevent excessive spending on deals.
4. Go second-hand
It’s now easier than ever to pick up great quality second-hand items and clothing online. Apps like Depop, Shpock, or Vinted have tons of items that are barely worn or used, from big brands to unusual gifts. There are also the long-running players like Facebook Marketplace and EBay. Not only can this be more cost-effective, it’s also greener!
If your family and friends are open to it, you could even hold a ‘charity-shop challenge’ to find the best Secret Santa gifts at a low price. You can save money and support charity at the same time.
5. Share costs
If you’re used to throwing lavish parties for friends and family, this year could be the time to make a change. Could you shift from having an expensive restaurant meal to a shindig at home? Could you ask them each to bring a dish (sometimes called ‘potluck’)? Given the economic climate, most people will be looking to cut spending and will probably be glad to shift to something less costly!
Keep the spirits high this festive season
Of course, it’s always good to get ahead of ourselves, so planning ahead for next year is also a great idea. Maji’s spending planner can help you stick to your limits throughout the year so you’ll have more to put aside. If you’re really struggling, you might consider working with a financial coach to help you work out how to make next year even better (and luckily, you can connect with one through Maji, too).
Tempted to join a ‘Christmas Club’ or other festive pre-pay scheme? These aren’t usually the best option; you won’t get any interest on your savings and you could be at risk of losing your money if the company goes bust. Saving into a limited-access account (like a 95-day account) or 1 year cash ISA (if you’ve got enough time!) can give you some interest and keep your money more secure.
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