Why you should budget for Christmas gifts in advance

According to the Bank of England, the average UK household spends an extra £800 in December, compared to other months of the year. Christmas adverts, peer pressure and feelings of guilt can cause us to spend more than we can comfortably afford on Christmas gifts. Christmas is all about giving, but you don’t want to give yourself a Christmas debt hangover, by using credit cards, overdrafts, personal loans and payday loans to fund your Christmas.

As we count down the days until Christmas, don’t forget to count your pennies too. The best way to be financially prudent at Christmas is to start budgeting and saving for Christmas in advance. That way you can enjoy the festivities and spend quality time with loved ones, without worrying and stressing about money.

Research conducted by the Debt Charity, StepChange revealed that almost a third of Brits go into debt to cover the cost of Christmas. It’s so easy to have a “spend now, worry about it later” mentality, especially in December, however this leads to financial stress and worry later on. January is the busiest time of the year for debt charities, as they are inundated with phone calls from people who overspent at Christmas and are in a financial bind. However, the Ghost of Christmas past doesn’t have to haunt you in the new year, with careful planning and budgeting, Christmas can be both debt-free and stress-free.

Your Christmas spending has a significant impact on how you start off the new year financially, this is why it’s especially important to create a Christmas budget and take care of your financial wellbeing during the festive season.

How to successfully budget for Christmas Presents:

Here are our 6 steps on how to successfully budget for Christmas:

1. Calculate how much you can afford to spend on Christmas gifts (without going into debt). It’s important to remember, even during the Christmas period that your other financial obligations still need to be paid. Make sure you put money aside for your regular bills and expenses, before buying Christmas gifts.

2. List all of the people you plan to buy Christmas gifts for and set a budget for each person.

3. Calculate your monthly Christmas savings amount by dividing your Budget for Christmas gifts by the number of months you have to save for Christmas.

4. Set up a standing order which transfers your monthly Christmas savings amount to a separate account. Moving your Christmas savings out of your everyday spend account reduces the temptation to spend the money.

5. Track your spending! It’s so easy to get carried away when buying Christmas gifts, this is why it’s important to make a budget and stick to it.

Use Our Free Christmas Gift Planner, Budgeter and Tracker Spreadsheet To Help You Stick To Your Christmas Gifts' Budget

Research conducted by the Debt Charity, StepChange, found that Christmas gifts are the highest Christmas expense. To help you stick to your Christmas Gift Budget, we are giving away a free Christmas Gift Planner, Budgeter and Tracker. Our interactive Spreadsheet and Google Sheet allows you to plan your Christmas gifts and track your spending against your budget. We walk you through using our Christmas Gifts, Planner, Budgeter and Tracker Spreadsheet and Google Sheet in the video below. We also have a Dollar Spreadsheet, a Euro Spreadsheet, and a numeric spreadsheet.

In response to numerous requests from our Easy Adulthood Community, we have introduced dedicated spreadsheets for the Pound, Euro, and Dollar currencies owing to their widespread usage. We recognise that our readership spans a variety of currencies; as a result, we've also developed a universal spreadsheet without currency symbols to accommodate the remaining currencies. Unfortunately, creating tailored spreadsheets for each currency exceeds our current capacity. We appreciate your understanding and continued support.

Don’t Feel obliged to buy Christmas gifts for eveyone and anyone!

If you feel obliged to buy Christmas gifts for acquaintances and distant relatives, check out this clip from Martin Lewis, explaining why you shouldn’t purchase gifts out of obligation.

References

1. How much do we Spend at Christmas? by The Bank of England

https://www.bankofengland.co.uk/knowledgebank/how-much-do-we-spend-at-christmas

2. Real cost of Christmas - Survey by StepChange

https://www.stepchange.org/media-centre/press-releases/real-cost-christmas.aspx