Ready or not, Christmas is coming again, with its extra-large helping of excitement and expense.
Shopping, parties and family feasts can make this a fun and sociable time, but costly and stressful too.
The average British household that celebrates Christmas was expecting to spend £751 on gifts, food and drink, decorations, trees and cards during last year’s festive season, according to a YouGov report1.
Whatever your budget, here are 5 steps to help ensure money worries don’t stop you enjoying yourself.
1. Know your limits
Just as you might regret one too many eggnogs the next morning, a festive spending spree can leave you with a financial headache come the New Year.
Think about how much you can spend, based on your usual disposable income – what’s left after paying the bills – plus any extra you’ve saved.
This doesn’t have to be an exact amount; a range may be better. That way, if you’ve earmarked £300-£350, for example, there’s no need to give up altogether if you breach the £300 mark.
It also helps to be really clear about why you’re setting a budget in the first place.
This should be personal to you. For example, you might tell yourself: ‘I want to stick to this budget to keep my savings intact, so I can start looking into summer holidays in January.’
2. Make a prioritised list
List all the things you’re likely to spend money on. This might include presents for family and friends, socialising and food and drink. Don’t forget other expenses like Christmas trees, decorations and gifts for colleagues or teachers too.
Note which expenses you could and couldn’t do without; allocate a proportion of your budget to each of these areas, starting with the essentials.
3. Put your mind to it
Before you start spending, think about some of the obstacles that could get in the way of sticking to your budget and how you could overcome them.
It can help to frame this in your mind at the outset. For example: ‘If I’m tempted to buy an extra present for a friend, I’ll remind myself to stick to my budget to keep my savings intact, so I can start looking into summer holidays in January.’
4. Don't go it alone
Who can keep track of every tap and swipe? Download HSBC’s free Connected Money app to help (available to HSBC UK customers with online banking and an iPhone on iOS 10 or above. Subject to terms and conditions).
You can allocate money in your savings accounts to a virtual pot – call it Christmas spending, for example – and house your budget there.
You can also view your spending by category and by merchants to keep an eye on how much you’ve spent and where.
And, if you want to be really good in the New Year, the Round Ups feature – due to be available early in 2019 – will enable you start replenishing your savings as you spend. It rounds up your debit card transactions to the nearest pound and moves the change from your current account to your savings account.
5. Pick your moments
Keep tabs on your budget and check you’re sticking to the plan. If not – and there’s always going to be the odd unexpected cost or extravagance – don’t panic. You can usually adjust accordingly by cutting spending in a different area: will anyone even notice you’re wearing last year’s Christmas jumper or there are 3 desserts instead of 4 to choose from on Boxing Day?
Our research2 says the best way to keep track of your finances is to create a habit using pockets of dead time, such as when you’re commuting or queuing.
So plan ahead when you’re going to check in and set a reminder on your phone so you don’t forget. This is also a great habit to carry forward into the New Year.
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