1 December 2014
Have yourselves a savvy little Christmas
Christmas is a time for giving; but give too much and you can be left with a stocking shaped hole in your bank balance. Here, Kate Murray, Savings Product Manager at Principality Building Society reveals a few top tips for savvy spending this Christmas.
It’s that wonderful time of year where supermarket shelves are filled with festive goodies, the shops and high streets are decked with tinsel and Christmas music flows through our stereos. Festive cheer is well and truly in the air and the sense of anticipation is all around us.
Yet while Christmas is a time for celebrating, it can also be a stressful time for many. Traditionally a time for giving, the pressure to purchase this year’s ‘must have’ gift and live up to the expectations of your family and friends, can place a real strain on the bank balance. Add to that the cost of filling the fridge with festive foodstuffs and the money required to fund a busy social calendar, and it’s easy to see how Christmas can become perhaps the most expensive time of year.
But yuletide doesn’t need to be a time for financial headaches as a bit of forward planning can go a long way to easing the financial burden. While it may still seem early to be considering the results of the inevitable Christmas spending splurge, the reality is that now is the time to put some realistic budgets in place to safeguard against a festive overspend.
Basic budget planning is a good place to start and this begins with a simple calculation of income versus essential outgoings for the month. Essential outgoings are those regular commitments that leave your account each month such as the mortgage or rent payment, utility bills, food, phone contracts and anything else that you’d expect to pay in a typical month.
Subtracting your essential outgoings from your likely income will give you a good idea of how much you’ll have left to play with. If you’ve been frugal through the year, this figure might be boosted by some additional funds you’ve saved up and these can be added to your budget to deliver even more festive cheer!
Once you’ve done your sums and calculated the money available to you it can then be helpful to allocate a portion of this pot in advance to each area of your likely Christmas spending – gifts, socialising, groceries, decorations and any other likely Christmas-related spending.
Of course, buying Christmas presents is one of the most significant December costs and we, as a nation, are typically generous in our giving. It can be difficult to reign ourselves in when buying gifts for loved ones. But this task can be made easier with a bit of prior planning.
Work out who you need to buy for, think about what you’d like to get them and assign a realistic budget to each person. Sticking to these budgets can be a challenge but it’s important not to allow yourself to fall into the ‘one more gift won’t hurt’ mentality. The reality is that one too many gifts can hurt the bank balance, so being disciplined can reduce the likelihood of the post-Christmas financial blues.
Another essential consideration for Christmas spending is to remember the ‘pay later’ element of any ‘buy now pay later’ offer. However attractive the terms of credit, any gift purchased on credit cards or store cards is a gift you’ll have to pay for in the future – maybe at a time after the festive period when money is tight. Where possible, saving in advance of Christmas is always advisable but, if there’s no option but to buy a gift on credit, planning out a repayment plan in advance can go some way to avoiding any nasty surprises in the future.
Christmas is a magical time of year and one where you can be forgiven for spending a little more than usual on indulging yourself and your loved ones. A little time spent planning for the occasion, however, can ensure you spend within your means and avoid leaving yourself a financial mountain to climb in the New Year.