How to prepare your finances for Christmas

As I write this, we are having a mini heatwave in October. It certainly feels more like summer than autumn! Nevertheless, it is an inescapable reality that Christmas will be upon us in just over two months. It can be a lovely time of the year, seeing friends and family and joining in the celebrations. However, it can also be expensive. So, how can you prepare your finances for Christmas?

I have made mistakes over the years and fallen into the trap of putting Christmas on a credit card. This was so disheartening. Going into a new year with debt and paying a chunk each month for a celebration that is long past is not something I plan to repeat.

However, we choose to participate each year, which means budgeting for presents, parties, food and other bits and bobs that come along as part of the season. Here are some ways I have found helpful to help prepare your finances for Christmas.

Save throughout the year

Putting money away during the course of the year in a separate account takes a lot of the stress out of the Christmas spending frenzy. Work out what you spent last year and divide it by 12, then make sure it is taken out automatically as soon as you have been paid.

Buy presents all year

Another good way to spread the cost of Christmas and to get the best bargains is to buy gifts all year round, starting in the January sales. Just don’t forget what you have bought for who, and where you have hidden all your bargain purchases! (I have done this…)

You can also get all your cards and wrap on the sales of you plan ahead.

Budget

Write a budget for Christmas. Work out what you need to buy and how much you can afford to spend and then stick to it.

I have a simple spreadsheet that I update each year. It includes gifts, food, socialising, and other miscellaneous expenses like clothing and decorations. You might also like to include travel expenses if you are visiting family or friends.

Don’t buy food you won’t eat

It sounds obvious, but how many times have you been faced with a lot of food waste after the festivities? Or bought a ton of treats that you don’t want to eat in the new year because you are aiming to lose weight?

Do you find yourself buying things because they are traditional, that actually hardly anyone likes? I used to buy or make a Christmas cake every year until I finally realised only I ate it. Last year I refused to purchase nuts or dates as, although we enjoy them, there were too many other treats so they sat around for months!

It’s easy to get carried away when it comes to the Christmas grocery shop. Try to make a realistic list and only buy what you will actually use.

Get a ‘free’ letter from Santa

If you have children, you might like to get them a letter from Santa. It’s not quite free, as you have to write in first but it’s a fun treat for the price of a stamp.

You can find out more here.

Use cash back sites

When you do your online Christmas shopping, don’t forget to use cash back sites, such as Top Cashback* or Quidco*.

It really is worth doing as you can get quite a lot back, even on gift card purchases.

Secret Santa

One of the best things you can do to prepare your finances for Christmas is to suggest to family and friendship groups that you have a secret Santa draw rather than buying individual gifts for everyone.

My family did this several years ago and I have found it takes so much of the stress out of Christmas. It saves time as well as money.

We don’t include children in our secret Santa or anyone still in full time education.

Getting organised

As you can see, being organised with your money is really the way to prepare your finances for Christmas.

What are your top tips to stop spending getting out of hand over the festive season?

For more ideas on saving money, you can buy my book! It is called Extreme Frugality: Save Money Like Your Grandma, and is available from Amazon here*.

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