A Christmas budget is a good place to start. This way you can make sure you’ve got the necessities covered and hopefully reduce any stress.
Here’s how to create a budget:
Before you start stocking up, take time to review your finances. Look at your outgoings vs your income – plus any savings you may have set aside for Christmas. This can help you see how much you have spare.
You may find areas where you could cut back on your spending for the holiday period. Use our budget planning tool to help create your budget.
The festive period is a tough time for many households – even more so with rising living costs. If you’re worried about money, there is help available.
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Deciding what you need can be a useful way to make sure the essentials aren’t forgotten. You could split everything into categories, such as:
Then assign a spending limit to each category. You could try breaking this down even further – by meal or recipient of gift, for example.
It can also be useful to prioritise your list, so you buy the most important items before your budget runs out. If you have any leftover money, you could save it for Christmas next year, or another savings goal.
Keep in mind – you don’t need to spend a lot of money to enjoy Christmas. Making your own decorations or creating your own traditions, such as going for a winter walk, can be more memorable than gifts you can buy.
If you’re not going to be able to cover the cost with your existing budget, you may need to revisit your list and look at where you can cut back further. Alternatively, you may be able to dip into savings or use credit if you need to.
Dipping into any savings you have means you might not need to borrow money. You can then set out a plan to rebuild your savings. Only use your savings if you feel comfortable doing so. It’s important to check the terms of your savings account too, as you may lose interest if you access your savings early.
If you don’t have enough money available, you could consider borrowing. Using a credit card may help cover the initial outlay, for example, but only spend what you can afford to repay. Make a plan to pay off anything you borrow as soon as you can. You may be charged interest if you don’t pay your credit card balance in full each month.
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Starting your shopping early can give you a better chance of finding the things you need for the price you’ve budgeted for. Leaving everything until the last minute could mean you have to spend more than you’d like to.
Plus, starting early can help you spread the cost of gifts and other bits over a few pay days – if that’s what you’ve planned for in your budget.
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Some retailers have sales in the run up to Christmas Day or have offers on bulk buying gifts. It pays to take some time to see what offers are on, especially if you’re planning to buy from specific shops. You may be able to bag yourself a bargain and save a little in your budget to be used on something else.
You may also find food offers in the lead up to Christmas Day. Are there items you could buy now and freeze? Or can you place a Christmas food order, so you know exactly how much you’re going to spend on food on the day?
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It’s never too early to start planning for next year’s Christmas and you could use the budget you’ve set out this year as a guide. Saving things like wrapping paper and gift bags to use next year can also help you cut down on some costs.
You may want to open a savings account and add a little each month to help cover the cost.
Explore: How to save money