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The Sun is shining, my front lawn has dried to a crisp, and we’ve just had the Summer Solstice so I am asking you this question: “are you financially prepared for Christmas?” Yes I’m being serious!
The big day is less than six months away and with only five pay days (or less) to go it is important to start making plans. Christmas is a big financial event and for many people it is a time when they find themselves going into debt or even further into to debt. For the sake of one day! That happens every year!
Luckily there are some steps you can take now to soften the blow and stop December from becoming overly stressful and overly expensive.
Your first step is work out exactly what Christmas is going to cost. This means the whole of Christmas! Not just the presents but everything. The whole event is actually a constant leeching of money but that’s no excuse. We just need to be ready. Here is my list of all potential expenditures over the Christmas period:
To help you work out how much you spend on each of these it might be worth taking a look at your accounts from last year. How much did you really spend on the kids’ presents (not what you thought you were going to spend)? What about your food shopping?
Write those numbers down. Be honest at this point. If they are big numbers and they scare you, that’s OK. Time for the next step.
It is not wise to under budget. If you expect Christmas is going to cost the same as last year then you need to be ready and have that money waiting. However, if you are feeling like you cannot afford that level of expenditure then there are a few things you can do.
Once you’ve thought about all the ways you are going to reduce your costs you need to budget for the rest. At the time of writing this there are five (end of the month) paydays left before Christmas. Don’t worry this is easy maths! Take that big number and divide it by five. Or however many paydays you have left until Christmas. That’s how much you need to put aside EACH month.
OR you can do what I like doing and start my Christmas shopping early. I buy a few bits each month and deduct this from what I should be saving. Anything that I don’t spend I put aside ready to spend in the future. This is probably the most practical way to approach your Christmas shopping as it will allow you the opportunity to get the best deals. Waiting until late November/early December leads to overspending and stress.
Now if the amount you’ve got to save each month scares you a bit then firstly revisit the ways to reduce the cost section above. If you’ve cut it down to the last penny then you need to look at other areas of your life. Luckily I’ve got a few posts already written about this. Check these out:
And as a final point don’t forget to use a cashback site like Quidco for all those online Christmas purchases. Sign up here and get an extra £10. Put some of your cash back in your pocket and maybe you’ll have enough for a little treat in January.
Disclaimer: Remember the information you read here does not represent financial advice. Any ideas or suggestions are just that and may not work for you. Read the full disclaimer here.
Looking After Your Pennies is an eco-friendly personal finance blog written and managed by Charlotte Jessop.
I write on a variety of topics including frugal lifestyle, eco-friendly living, money making ideas and generally how to make your money go further.