With six weeks to go until Christmas, getting your finances in shape now will save you the additional stress and financial pressure of leaving your Christmas spending until last minute.
Half of Brits in survey say they will be setting themselves a Christmas budget but only 20% are committed to not exceeding their budget, while 30% will set a budget but expect to go over it, according to research by MoneySuperMarket.
The experts at MoneySuperMarket share their top tips to help you financially prepare for the festive season:
Make savings now
It’s not too late to start saving — cutting back on non-essentials where you can, and putting some money aside now can spread the cost of Christmas. If you’re paid monthly starting now can mean you don’t have to completely rely on your December salary to pay for everything.
Once you’ve set a budget, stick to it
While it can be tempting to go overboard treating friends and family to expensive Christmas presents and splashing out on luxury food and drink, “the golden rule of festive spending is to know your budget,” says MoneySuperMarket’s money expert Claudia Nicholls.
“Keep a running total of your Christmas spending so you know how much of your budget you’ve spent. Getting swept up in the festive cheer could leave you starting 2021 in the red.”
Cut back your Christmas list
If your list of loved ones to buy gifts for is growing too long, think about speaking to friends and family about cutting back.
Consider introducing a ‘Secret Santa’ scheme in which you each pick one person to buy for, making your own, small, personalised gifts or swap present buying for a charitable donation to a good cause.
Try not to borrow for Christmas — but use a 0% credit card if you do
“If you haven’t managed to save this year a good way to help spread cost over a longer period is to shop around for a credit card offering 0% interest on purchases,” says Nicholls.
“Just make sure you pay off the balance as soon as possible and borrow within your means, or you may find you will still be paying off this year’s Christmas presents next year.”
Review existing debts
“If you already have credit card debt across one or more card that you pay interest on, consolidating your debts by transferring to a 0% card could be cheaper and allow you to pay off your debts more quickly,” says Nicholls.
“Just make sure you know when the interest-free period is due to come to an end and make sure your balance is paid off by then as interest will be charged on any remaining balance.”
Review your household bills
As the weather gets colder and Brits are spending more time at home due to the coronavirus lockdown, now is a good time to make sure you’re not paying too much on your energy bills.
“If you’ve not switched your energy supplier in the last 12 months or have slipped onto a standard or default tariff, it is definitely worth seeing what you can save by switching to a cheaper supplier,” Nicholls advises.
Make the most of the deals — but avoid impulse purchases
Discount offers, particularly around Black Friday can be tempting, but steer clear of impulse purchases and research prices before you buy — you might find an item cheaper elsewhere.
When shopping online, look out for free standard delivery deals rather than next day deliveries which are almost always more expensive.
“As well as buying Christmas presents, Black Friday might be a chance to get some great deals on your bills. Mobile phones in particular are worth looking at as lots of providers will be offering deals this year,” says Nicholls.
Use a discount code
“There are hundreds of vouchers and discount codes to be found online which can help you make big savings on your Christmas shopping. Try using voucher websites or go to retailer websites directly,” Nicholls suggests.
Don’t fall into the store card trap
Although the idea of an immediate discount on Christmas gifts or money back may be tempting, the interest rate on purchases is likely to be higher. The impact of not reading the terms and conditions could also prove costly.
Online shopping banks should also be treated with caution. If you don’t pay on time, you could end up being chased on it by a debt collector, and damaging your credit score.
Make saving your resolution for 2021
Start putting aside money into a regular savers account in the new year. Starting to save as soon as possible will mean that by this time next year you will have built up savings which will mean you won’t have to fund Christmas 2021 with debt.
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