Have a Financially Happy Christmas!
With all the financial ups and downs we’ve had so far this year, it’s even more important to think about how we can afford a Christmas that will make everyone happy. And, in our opinion, it’s never too early to start!
Rising energy costs and food bills mean many might want to have a thrifty holiday season this year. Here are some rules to get the best out of creating a budget. If you have a decision to make about your spending, you can use them as your backup. You don't want to start the new year paying off your Christmas debt.
Rule number one: Plan how much you will spend on Christmas this year and stick to it. The amount you have available to spend will depend on how much you put aside after your bills and essentials are paid for each month. It's never too early to start saving; the sooner you start, the less you will need to put aside each month. Planning your Christmas budget is easier if you do a little research. Then you can assign an amount to each person you are buying for and a separate budget for food and drink.
Rule number two: If you plan to host, create a guest list and stick to that too! For some, having a house full of people at Christmas is a joy, but it can be expensive. Assign an amount per guest in your budget: it can mount up quickly, especially if alcohol will be served.
Rule number three: Track your spending. Write it down each time you make a purchase - whether it is a gift, a bottle of wine, or a cute little toy outfit for the dog. You don't need a fancy app (unless you want one!). You can use a spreadsheet on your computer or phone to determine how much you have spent each time you buy something. It's so easy to forget what you spend if you don't make a note of it – not tracking your spending properly is the easiest way to bust your budget wide open!
Rule number four: Don't borrow for Christmas. Budgeting over a few months or a year is much better than paying back borrowed money with interest.
Discuss your Christmas budget with your family and friends, and maybe you can agree with some that you will hold off buying for each other until next year. Talking to your children about it doesn't have to be scary for them – you don't have to tell them about rising costs and the energy crisis, for example. However, getting them involved early in creating a list of things they want that won't break the bank will give them a sense of responsibility.
Sticking to these four essential rules doesn't mean you can't move money around within your budget. If you find that perfect gift for a friend or family member that costs less than the amount you have allocated in your budget, don't be shy about moving the rest of the money around to spend elsewhere.
With a touch of willpower and help from your family and friends, you'll be heading into Christmas and the new year with a clean slate. And we're hoping the desire to start all over again earlier this time!