Festive Finances: How To Survive The Most Expensive Time Of The Year

For many of us, it’s the most wonderful time of the year, but Christmas can also be a major challenge for our finances. With party season in full swing for what seems like months on end and more and more presents to buy each year, it’s no wonder most of us feel the squeeze. If you’re worried about how your festive finances are going to stretch, here are some handy tips to see you through. 

The importance of budgeting

Budgeting is crucial throughout the year, but it’s particularly important during the festive season when you need your wages to stretch that little bit further. Before you start spending a fortune on gifts or buying new outfits for every party, figure out how much you can afford to spend without giving yourself nothing to live on in January. Using a very simple formula, which compares your income to your outgoings, you can work out how much disposable income you have. If you have a deficit, it’s wise to consider dipping into your savings before resorting to using credit cards or store cards. Once you have an idea of how much money is in the pot, you can set a budget for specific outgoings, for example, a night out with friends, the work Christmas party or presents for your partner or family. When you’ve got figures in front of you, do your best to stick to the budget, and if you do go over or spend less than anticipated, update your budget accordingly. 

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Saving money over Christmas

Many of us are guilty of getting carried away when Christmas is on the horizon, and we spend with wild abandon compared to the rest of the year. Once you’ve got your budget, this will help you become less frivolous, but it’s also a good idea to look for ways to save. Buying presents can be expensive, especially if you have a large family. If you can’t afford to splash out, talk to your siblings and come to an arrangement, for example, buying for one person or spending a maximum of £10 or £20 per person. It’s also a great idea to shop around for the best prices and to take advantage of flash sales and discounts. The key to successful shopping lies in identifying items you want to buy and then purchasing them when you have a code you can use or the store is on sale. Resist the temptation to add a load of extra items to your basket just because they’re on offer. Stick to what you need. 

Another critical area for many people is socialising. We tend to go out more over the festive period and the cost of a few drinks here and there can soon add up. If you’re struggling to keep pace in terms of your finances, take a set amount of money out with you, or talk to your friends about doing something different. You could organise a party or a film night at home, for example, rather than going to an expensive restaurant or out for cocktails. 

For those who tend to splash the cash on festive fashion, there are some fabulous solutions out there. Instead of buying new outfits for every occasion, why not opt to rent clothing, swap items with friends or family members or buy vintage styles? You could also customise existing pieces to create a new look on a shoestring. As more and more people look to support sustainable fashion and contribute to saving the planet, rental outlets are becoming more commonplace and second-hand clothing is enjoying a moment in the spotlight. 

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Dealing with debt

If you’re already in debt, or you’re finding it difficult to make ends meet, the prospect of surviving Christmas and January, the longest month in the world, may seem daunting. With debt, the best way to move in the right direction is to confront the problem and to be realistic about what you’re dealing with. It’s tempting to bury your head in the sand and tell yourself that you’ll cross that bridge next year, but if you’re overspending for the next few weeks or months, the situation will get even worse. Check all your balances and accounts and make sure you understand how much money you owe and who you owe it too. Next, try and start paying off debts, prioritising payments that are overdue or due now and debts that are costing you, for example, credit cards. There are various options available to you, and it’s wise to see a financial adviser to get an understanding of what will work best for you. Before you look into options like loans without guarantors or you apply for a new credit card, consider avenues that will cost you less in the long-term. You may be able to borrow money from a family member or to come to an arrangement with your creditors with the help of a debt adviser. 

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Cutting back in January

The vast majority of people find themselves counting down the days until payday in January following the excesses of Christmas and the festive party season. The good news is that there are several ways you can cut back spending to make life easier in the New Year. Here are some ideas:

Budget-friendly grocery shopping tips

How much money do you spend on food per month? If you took a moment to add up all your supermarket receipts and add in restaurants and takeaways, you might be shocked at just how much of your salary goes on edible items. You could save a substantial amount of money by planning menus in advance, taking lunches to work, swapping your high street coffee for a cup at the office and doing your food shop online. When you order online, you have a running total in the corner, and you don’t have to contend with flashing lights and giant neon signs encouraging you to stuff your trolley full of products you don’t need. Stocking up on shopping will also eliminate the need to pop into convenience stores every day, which should save you money. 

Socialising without spending

If you’re keen to see your friends and make plans to beat the blues in January, you don’t have to break the bank. There are plenty of ways to have fun for free. Consider staying in, rather than going out and look for free events and activities. Think about how much you would spend going to a restaurant compared to having dinner together at somebody’s house, for example. If you all chip in, you’ll enjoy a brilliant evening for virtually nothing. 

Cut out non-essentials

When you’re budgeting, look for expenses you can reduce easily. Most of us have a few luxury items on our list every month, and if times are hard, these should be the first to go. Lower spending on clothes, going out and memberships and subscriptions you don’t use or need. If you have a gym membership you rarely use, for example, you could save a fortune by working out at home or by paying as you go. 

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There’s no doubt that Christmas can be a pricey time of year. Festive fun is all well and good, but nobody wants to be scrabbling around under the sofa looking for spare pennies come January. If you’re worried about your finances in the coming weeks and months, it’s wise to draw up a budget, to try and monitor spending and saving, and to avoid getting into more debt if you’re already short of cash. Plan ahead, talk to friends and family about how much you want to spend on socialising and buying gifts and don’t be afraid to ask for help if money worries are getting you down. If you’re feeling the pinch after the festive season, strip back spending to cover essentials and cut out luxury items.