Financial Planning

How Much Christmas Really Costs…

How Much Christmas Really Costs…

Emerging from the 2018 holiday season, many of us will be looking at our bank accounts wondering: “How on earth did all that money disappear?”

The truth is, very few of us have any idea how much will spend in the run-up to – and during – Christmas. The fact that so many people cannot remember how much they spent once it’s over, furthermore, shows that this is an area where most of us need to pay some financial attention.

So, what is the damage exactly? Of course, every person and family is different. Yet on average, the highest Christmas spenders in the UK are families with children.

If the children are under 18 then Christmas spending in these households ranges anything from £1000 to nearly £3000 (the bulk of which comes from buying gifts). If the children are over 18, however, then the costs tend to halve.

One particularly frightening statistic is that around 10% of UK households will put the entire cost of Christmas onto their credit card. Starting 2019 with a huge holiday debt to pay isn’t the most fun way to begin the new year!

So, is there anything that can be done? Is there any way to reign in your Christmas spending without ruining the fun and festivities of the season?

Here are six tips you might want to bookmark for 2019…


#1 Budget

The temptation to overspend at Christmas can be enormous, and retailers play on that urge with great success. However, by drawing up a Christmas budget ahead of time this can go miles towards helping you purchase gifts for your loved ones without breaking the bank.

For instance, perhaps you are looking at the £1000+ you spent at Christmas 2018 and would like to get that down to £500 for 2019. Simply draw up a budget and allocate the total between the various gift recipients. For instance, you could allocate £100 each for mum and dad, £200 to split evenly between the children and £100 for extended family and friends.


#2 The gift list

One of the biggest reasons UK households overspend at Christmas is because they feel pressure to buy for friends and the wider family. After all, no one wants to be the family getting lots of gifts from everyone else but who has given little/nothing back.

There is actually a simple way to address this, and that’s by talking to each other! For instance, try approaching your sisters, brothers and whoever else and suggest that everyone just buys for their own immediate families this year. You never know, there’s a good chance that each of them is wondering how on earth they are going to afford to buy for you this Christmas, so they might well be relieved!

If you really feel like you must buy presents for extended family and friends, suggest lowering the cost of these gifts. For instance, rather than spending £20 on each person maybe send a card instead with a meaningful/personalised message inside.

You could also try sending gifts to your brother’s whole family, rather than a present to each individual member of his family (e.g. him, his wife, his son, his daughter…). Secret Santa is also another great option to try.


#3 Upshifting

Spending on premium products always surges at Christmas, as people buy fancier food, drink condiments and the like compared to what they normally purchase.

If you’re looking to rein in unnecessary spending at Christmas in 2019, ask yourself whether you really need to buy that posh ham rather than the one you would have bought at another time during the year.

We’re not experts on food, but there are plenty of ways to make an amazing, tasty Christmas dinner on a lower supermarket spend! If you really do need items on the nicer side then consider the premium products at some of the more “budget” supermarkets.


#4 Second hand

Are your children really going to mind if you buy something for them which does not have the original packaging? In some cases, they might. However, when it comes to things like a games console they are probably not going to care.

The same goes for small children and their toys. Many adults will also appreciate a quality gift which has been used before and bought at a bargain price.


#5 Play the digital game

When you buy items online, it pays to do your Christmas shopping ahead of time so that you can leave these potential purchases in your online basket for a few days. Sometimes, to get you across the line these retailers will send you an email with a special offer!

Keep a lookout for vouchers throughout the year, and store these up in preparation. Also, shop around and compare the prices of other retailers to see if you can get a better deal.


#6 Delay Christmas…

Yes, this is a fairly radical suggestion. Yet some families are able to do this and get massive discount prices in the January sales as retailers look to clear their remaining stock.

One idea might be for your family to have “stockings gifts” on Christmas day, so people can still enjoy the spirit of the season and children, in particular, can still feel like they “got something from santa!” In January, when the sales come on, this could be the time where your family buys its “big gifts” for one another.

Again, we emphasise that this is a radical idea and it’s not for everyone! Yet, if you are looking to save money at Christmas we do suggest that you consider whether there may be any non-urgent, higher-cost purchases that might be able to wait a few weeks. For the sake of 40% off or even more, this could well total to hundreds of pounds.


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