The festive season is rapidly approaching and as we enter the first full week of December many households will be starting to plan their spending over Christmas and New Year while taking into account the ongoing cost of living crisis which is having a huge impact on the prices of everyday food items at the supermarket.
According to the latest data, 39 per cent of people across the UK plan to spend much less on Christmas than in previous years, reducing socialising and travelling during the festive fortnight compared to 2021. Independent finance broker, Norton Finance, estimates that 16 per cent of December spending goes towards food, 19 per cent on seasonal decorations and 65 per cent on gifts.
With such a large percentage of spending going towards buying presents for loved ones, friends, neighbours and work colleagues, Norton Finance has created a budgeting guide to help everyone tackle this traditionally expensive period.
Six top tips to manage Christmas on a budget
Create a realistic budget
Norton Finance recommends taking a realistic look at your financial situation and establishing an amount you will be comfortable increasing your spending by.
Paul Stringer of Norton Finance explains: “Most of us increase our spending for Christmas, but it’s best not to be too drastic. By aiming for modest increases of 15% or less, you can still give yourself flexibility for the festive season without limiting other areas of spending.
“If you don’t have savings set aside and need to borrow to meet the extra costs, it’s important to decide at the outset what you think you can afford, and how long you’re prepared to take to make any repayments.”
Review your spending
Treat yourself like your own business. Regularly reviewing your finances will help you stay on track with expenses. If it looks like you may go over budget, make changes to reduce non-essential spending habits.
Use cashback schemes
It is unlikely that you will be able to avoid any increase in spending in the run up to Christmas, so try and make the most of the extra spending by getting cashback for your purchases. This could be through a cashback site or a credit card that offers cashback, either one will put a little bit of your spending back in your pocket.
Don’t leave it too late
Leaving your Christmas shopping until the last minute is an easy way to spend more than you need to thanks to needing to pay additional delivery fees. Wherever possible do your shopping far enough in advance to qualify for free delivery.
Giving yourself this additional time should also reduce some of the stress associated with gift shopping.
How to borrow
If you can’t make ends meet, consider borrowing using fixed-term loans, rather than credit cards or payday loans, which are cheaper to use in the long-term. If you do need to borrow, it’s worthwhile shopping around for loans that have repayments suitable for your situation.
Make those repayments
Don’t miss any repayments as this can negatively affect your credit score and cause more problems in the long-term. Keep an eye on your credit score and learn how to improve it with tools like the ‘how to improve your credit score tool’ on Norton Finance here.
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