Feeling the economic squeeze and worried about your Christmas expenses? You’re not alone. My Debt Plan offers a guide to enjoying the holiday season without overspending.
As the cost of living in the UK continues to rise, impacting almost every facet of life, it’s no shock that Christmas spending is also expected to be affected this year.
A recent KPMG survey revealed that 39% of individuals plan to reduce their gift budget, 34% intend to spend less on festive groceries, and 35% will cut down on dining out this Christmas. The 35-44 age group is most impacted by inflation, but people of all ages are grappling with increased costs for energy, food, fuel, and a lack of savings to fall back on.
If you’re on a tight budget this Christmas, there’s no need to worry; celebrating festively without overspending is still achievable. Here are our top tips for an economical Christmas:
Spread Costs Over Time
December’s expenses, including gifts, festive meals, and parties, can be daunting. To manage your budget and avoid debt, consider spreading costs over several months. Purchasing items gradually can prevent the stress of a hefty year-end bill. For example, you could start buying non-perishable food and drinks from autumn and add a little extra to your monthly food budget, rather than facing a large expense in December.
Set a Gift Spending Limit
Remember, the value of a Christmas gift lies in its thoughtfulness, not its price tag. Setting a spending limit for presents, especially for adults, can help manage expectations and keep expenses in check. This limit could range from £10 to £100, depending on your budget and number of recipients.
Propose a Secret Santa Exchange
For those with large families or friend groups, a Secret Santa can be a budget-friendly way to exchange gifts. Each person only buys for one other, keeping the cost and effort manageable. You can also set a spending limit or theme for the gifts to add to the fun.
Be a Savvy Shopper
Starting your Christmas shopping early allows you to compare prices and hunt for the best deals. This approach can prevent last-minute panic buying and overspending. However, be cautious of tempting buy now, pay later schemes or store credit card offers, as these can lead to debt and affect your credit score.
Embrace Pre-Loved Gifts
Consider buying pre-loved gifts, particularly for those who appreciate designer or vintage items. Websites like Depop, Vinted, and eBay, or local charity shops, often have unique, desirable items at a fraction of the cost.
Get Everyone Involved in Festive Feasting
If hosting Christmas, ask guests to contribute a dish or drink, making the celebration more affordable. Festive groceries can be pricey, so sharing the responsibility can significantly reduce costs.
Opt for Cost-Effective Grocery Alternatives
Being price-conscious with your supermarket shopping is also wise. Comparing prices across stores and opting for less expensive alternatives, like chicken instead of turkey or cava instead of prosecco, can help stretch your budget further.