While figures from a recent YouGov survey indicate that many of us intend to spend less this year on Christmas than we did last year, we’re still looking at a cost of £796 on average for each of us over the festive period. There’s no doubt that Christmas is probably the most expensive time of the year – once you add up the spend on food, drink, presents, travel and decorations you are left with a huge bill that can feel unmanageable. The problem is that it’s Christmas and we don’t want to miss out – which can lead to some fairly reckless spending. So, what can you do if Christmas cost a bit too much this year?
It’s the most obvious solution but if you’re short as a result of the festive spend then don’t panic as making a few savings over the coming months can help you get back on the right side of the financial line. Rather than taking any drastic steps, try a few subtle money saving measures, such as taking the bike, rather than the car, to work or reducing the luxury items on your shopping list – these can take the pressure off, especially when combined with other money saving measures.
Try to go without for a month (or more)
It’s surprising how much cash can be saved from cutting something out of your life for a month. The most obvious choice is alcohol – have a ‘Dry January’ next year and you could save £40 – £300 on average across the month, depending on how much you normally drink. Give up meat for a month and your shopping bills will reduce quite significantly, or try to stop smoking permanently and you could see savings of anything from £50 a month upwards, depending on your habit.
Manage your debts
If you decided to take out a loan, overdraft or credit card to help deal with the cost of Christmas, don’t panic. Make sure you’ve got the right kind of debt for your income and it’s simply a case of paying it off over a period of time – if you know you only need a month to get back into the black then choose something like a payday loan but for longer periods of repayment, instalment loans are much easier to manage and tend to be lower pressure with smaller monthly repayments. If you have cash sitting on high interest credit cards then move these amounts to zero interest cards if you’re able to. Factor your repayments into your monthly budgeting to make sure that you can comfortably cover them.
This is, of course, easier said than done and if you’re already working all the hours under the sun then you might struggle to find the time to do this. However, if you’ve got a particular skill that someone might pay for, why not look into monetising it – perhaps you make beautiful knitted toys, or you might be a great writer or photographer. There are plenty of ‘people for hire’ websites around now where you can hire out your skills on an hourly basis without any official qualifications and this could earn you just enough each month to help you rebalance your Christmas overspend.
Be savvy with savings
There are many savings to be made these days and if you’re careful then you can make small adjustments to your lifestyle that incorporate these tweaks and will help to make the Christmas overindulgence less severe. For example, there are many credit cards where you can receive cashback for what you spend, even if you’re clearing the balance each month to avoid the interest. Even bank accounts now offer this – pay your bills by direct debt from your current account and you could be eligible for cashback. You can also make savings by switching your energy bills to a cheaper provider, building up reward points with your favourite supermarket and taking your own bags when you go shopping to avoid the new 5p charge. These may seem like tiny savings on their own but, add them together, and they can be a great help.
Start saving for next Christmas now
Once you start to get your finances back into condition again, think about how to avoid ending up in the same position next year. If we all spend an average of £796 on Christmas then you need to save £66.30 a month – £16.50 a week – to make sure that you don’t find yourself with the same worries at the start of 2017.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read more about Alex Hartley