A simple guide to a financially calmer Christmas

By Eloise Broome, Cannaccord Wealth

Christmas is a wonderful time of year to spend quality time with family and friends and to give back to one another, but it can become busy and expensive. As a result, Christmas can quickly turn from joyful to stressful. How can we plan better for Christmas and keep those stress levels down?

How much do we spend at Christmas?

The Bank of England website suggests that a typical UK household spends an average of £713 more at Christmas than any other month. This money is spent on gifts, food, drinks and entertainment. Ultimately, these additional expenses are likely to be the part of Christmas that can cause the most stress – but this doesn’t have to be the case.

Planning in advance is key to keeping stress levels at merry levels

It’s helpful to start planning early and manage our time efficiently. January is usually the best time to start saving, but there’s still time left.

A key element of planning for Christmas is to plan for what you can realistically afford based on your income and outgoings. A spreadsheet may be a useful idea to assign a budget to each different aspect of Christmas and to establish needs vs. wants. This can be especially beneficial to those who may be planning a work Christmas party this year, or those hoping to entertain clients.

Establishing a clear budget early and establishing anticipated costs such as venue, food and drinks, entertainment and decorations can help to reduce the stress of organising these events.

To plan based on affordability, it can be useful to review your workplace’s previous Christmas expenditure to give you an idea of a realistic budget, avoiding overspending.

 While you may feel obliged to invite as many guests to your event as possible, deciding who you can realistically invite is key, in addition to considering an off-peak date during the week to hire out a venue if your event is out of office.

Christmas packages are often advertised earlier on in the rundown to Christmas too, so keep an eye out for those as they are a great way to reduce costs while catering for a larger group of people.

Reflect on your outgoings

Work life often dominates our time and it’s easy to fall into the habit of buying lunch every day or an expensive coffee here or there. There is nothing wrong with a treat, but reviewing your outgoings and saving early on can make a huge difference. This may also include ending any unnecessary subscriptions, reducing supermarket overspending and cutting down on expensive meals.

A common misconception people have is that we must buy presents closer to Christmas. However, deals are more likely to be available earlier on in the year. After all, who doesn’t love a good bargain?

It may make sense to do some Christmas shopping way in advance to save some money.

Rethink expensive gifts

There can often be some stigma surrounding handmade or lower-cost gifts and it can be too easy to get sucked into expensive packaging. In the UK alone, it is estimated we produce three million tonnes of extra waste during the Christmas period and £42m worth of unwanted presents are sent to landfill.

There are many ways we can give back to one another and be kind to the environment. Perhaps at work, you and your colleagues could consider chipping in some money to a charity or arrange a Secret Santa with a strict budget where each person writes down a small gift they genuinely need. Equally, you and your colleagues may choose to have a ‘no presents pact’ and just stick to Christmas cards this year! You could even consider this with family members.

There are many ideas to reduce the cost of Christmas and give back to one another.

What are the key takeaways?

• Review your expenditure
• Set yourself a realistic budget
• Plan early
• Do your Christmas shopping early
• Decide who to buy for and what you can afford to gift
• Spend time on what matters.