11 December 2015
Saving tips for Christmas
Christmas – it creeps up on us every year and unless you have a never ending pot of money, it can require some strict financial planning. Do you save all year round? Will you be using your most recent pay cheque to cover the cost of the turkey? Whatever the case, we all follow different saving and spending patterns over Christmas. Here, Kate Murray, Principality Savings Product Manager explores the way we all save and spend and shares her tips for avoiding the festive financial fear.
According to the classic tune, Christmas is the most wonderful time of the year. With presents, the turkey and the festive films, Christmas should be a time of celebration and relaxing with loved ones. But there is no denying our finances will take a sizeable hit throughout the festive season. Expenditures can range from the obvious purchases like food and drinks to feed the family, to the things we might forget about such as the taxi journey home after your work night out. Our spending and savings habits around Christmas can change year on year and with this in mind we asked 1000 people across Wales and England just how they will be managing their finances during the festive season.
The average household in the UK, according to our research, will spend £501 on Christmas this year. In Wales, this is £186 less than five years ago. So are we becoming more stringent with our money? Or are we just cutting back on the unnecessary purchases and being savvier with our spending? Either way you still need a budget because despite this saving, 10 per cent of us will still be putting Christmas on a credit card this year. Whilst 28 per cent have been saving for Christmas all year, you might have only started to think about saving for Christmas in the past few weeks. Regardless, there are plenty of ways to make your finances run that little bit smoother over Christmas.
Set a budget and stick to it
Something we’re all guilty of is making those last-minute dashes to the shops for presents, food, drinks and party outfits. Whilst they may seem like necessary purchases they are probably the biggest culprits in letting those unwanted costs build up. Having a strict budget planner in place will realistically help you to map out what you can actually afford to spend this year based on your income or savings. It’s advisable to set a budget for each area, whether that’s presents or food, rather than an overall amount for everything.
Make a savings plan well in advance
Our survey discovered that 13 per cent of respondents have admitted they will have to dip into their existing savings to cover Christmas costs. While this is actually down from 34 per cent in 2010, it could still result in an unwanted chunk taken out of savings which were previously set aside for something else. It’s best to treat Christmas as a separate expenditure entirely, leaving your outstanding savings account untouched.
There is nothing wrong with putting your Christmas spending on a credit card as long as you can afford to pay it back. But no matter how attractive the deal is make sure you are able to afford any loans you take out – no Christmas present is worth the debt.
It’s about getting the balance right and careful planning in advance really is the best way to do this.
Make a list (and check it twice)
If you haven’t already, make a list of all the people you need to buy for and stick to it. Use your budget planner to assign a money limit for each person. The same can be said for your food and drink shopping list. Taking note of purchases already bought and those still on the list will help you from steering towards any unnecessary or impulsive items. You might even think twice about how many presents you buy this year. Ask yourself, are they all really necessary? In fact, of our survey respondents who said they are planning on spending less on Christmas this year, 57 per cent said they would be cutting back on Christmas present costs over anything else. There are easy ways to cut back on Christmas present costs to save those pennies, such as setting a price limit, making your own gifts or even suggesting a Secret Santa draw with your family.
Keep an eye out for a bargain
If you missed any Black Friday or Cyber Monday deals then fear not; using online discount sites can throw up some really good bargains. A number of money saving websites have a list of new offers every week, possibly even more in the lead up to the big day. Make sure the deal is something you’re actually looking for though; don’t be tempted into buying something just because it has a reduced price.
When it comes to saving for Christmas, our survey proves there is no one size fits all. But what is clear is our bank accounts are sure to take a hit over the festive period. Sticking to a budget and a list of purchases will leave you in good stead for a stress-free Christmas, and mean you won’t have to tighten the purse strings too much come January.