Christmas may still be a couple of months away, but here’s why you need to start saving now to prevent a ho-ho-hole in your finances.
We spent £452 on average last year on Christmas, according to research from Halifax. Standing at the top of the leaderboard of items we tend to splash out most on are booze, gifts and the Christmas roast. Women are likely to spend more than men; £482 on average versus £419.
Meanwhile, the independent Money Advice Service (MAS) has found that nearly a third (30 per cent) of Brits feel pressured to spend more than they can afford to over the festive period.
So, in order to avoid a financial hangover in the New Year, here are some tips from MAS on what you can do now to ease the strain on your wallet:
Set a budget
Work out how much you can afford to spend in total over Christmas. Factor in everything, from food, gifts and decorations, to social events like the office Christmas party. MAS’s Christmas money planner tool (www.moneyadviceservice.org.uk/en/tools/christmas-money-planner) can help you create your own budget and see how much you can save in time for Christmas Day.
Make snips to your spending habits
Free up more money by thinking about whether there are any costs you can either reduce or cut out altogether. Halifax suggests ditching your regular takeaway coffee, for example, as small savings can soon add up. MAS has a Quick Cash Finder tool to help you work out where and how you could cut back on your regular spend (www.moneyadviceservice.org.uk/en/tools/quick-cash-finder).
Keep track of what you’ve got coming in and going out
Putting aside a bit of money each week between now and Christmas could soon add up by the time December comes around. If you want to avoid the temptation to dip into it, you could also ringfence it by putting it in an easy access savings account, rather than your day-to-day current account. Giles Martin, head of savings at Halifax, says: “To avoid a bill shock, it’s worth starting to save now to spread the cost over several months.” The MAS also suggests making a note of your spending, whether it’s by keeping receipts or just making a note on your phone or in a notebook. This will mean you’re more likely to stick to your budget. You can also simply take out a certain amount of cash each week or day, so you know how much you have to spend.
Switch to own brand
See if you could save a few pounds by switching to your supermarket’s own brand on regular purchases, such as cereal or ketchup, or by doing your food shop at a different supermarket altogether. Who knows, you might not even be able to tell the difference.
Have an early spring clean
We may just be about to head into the winter months, but why not have a clearout now to make money for Christmas, and look into selling any old and unwanted items on websites such as eBay and Gumtree? It could even make more room for when family and friends pile round for Christmas.