Tracking your spending, controlling your outgoings, and having oversight of any debt you take on is essential, and at few times as much as during Christmas, when pressure, excitement and tradition often supersede our savvier sides.
Today we’ll run through the easy steps to building a Christmas budget to keep cool and calm, enjoying a relaxed, debt-free festive season without the stress.
Decide What You Can Afford
Task one: be realistic about your finances. You can look at everything you have due in November and December, your existing outgoings (think rent, groceries, travel, utilities) and what you have saved.
Don’t panic if that isn’t much because there are all sorts of ways to spend wisely and carefully – the important thing is that you have confidence that whatever budget you create is achievable.
Money Helper has a free online budget planner tool available here to write everything down if you’re worried about forgetting things.
Make a List
Next step: make a list of everything that you consider essential for Christmas. It’s normally best to split this into categories, so you don’t forget anything – something like this:
- Christmas dinner: turkey, gravy, veggies, potatoes, stuffing, pudding, and crackers.
- Gifts: kids, spouse or partner, immediate family, wrapping paper.
- Decorations: Christmas tree, baubles, lights.
- Events: Christmas jumper, a bottle of wine or contribution to dinner.
Breaking it down into a checklist means you can look for bargains as you go, tick things off, avoid overbuying, and know your total Christmas cost before you spend a penny.
This Christmas spending guide has great insights and advice about buying Christmas presents on a budget and stretching a gifting budget a little further. Well worth bookmarking in our opinion.
Look for Cost-Effective Alternatives
Now you know what you have to spend and what you have to buy. If there is a gap between those two totals, be sensible about how you cover any extra costs.
Try not to exhaust your savings if you don’t have to, and only use borrowing if you are confident you have the budget to repay everything in full – remember, interest will make Christmas spending more expensive!
If you can’t extend your budget, you can choose which items are non-negotiable and which you can do a little cheaper.
For example, you can choose one or two events to attend rather than four or set up a secret Santa to reduce the number of gifts you need to buy.
The less you leave to the last minute, the more time you have to shop around, research offers, or compare prices, so you get the very best deal on every item on your comprehensive Christmas budget.