The instinct may be to treat the family even more than usual this Christmas to make up for the year we’ve all had. But what you don’t want is to start 2021 in the red. Planning, budgeting and tracking your spend is the best way to have a brilliant time without giving yourself a financial hangover.
If you’re on a tight budget but more determined than ever to make the most of Christmas, here are some tips to help you avoid starting the new year with a financial hangover:
Plan before you spend, consider using an online Christmas calculator tool. Don’t just whack it all on the credit card. Make a list of everyone you are buying for and how much you can afford to spend on each based on available income – after all the bills and essentials are covered.
Stick to your budget. Once you’ve set a budget, keep track of your spending and you’re less likely to overspend. Whether it’s by using a notebook, an app on your phone or an excel spreadsheet on your laptop, choose a system that works for you. Create an email folder for receipts and get them emailed to you. (Better still, create a separate email account for spending and you can ignore all the marketing emails too!)
Do ‘family gifts’ or a Secret Santa – if you’ve got a lot of people to buy for, extended family and friend groups – this is a great way to keep the costs down. A large box of chocs, tin of biscuits or sweets or a board game can be a great family gift.
Watch your bank account and credit card like a hawk. If your bank offers you alerts for when your current account dips below a set amount, opt in.
Christmas shopping advice
Tempting as they are, try to avoid ‘buy now, pay later’ offers from retailers unless you have a plan in place for repaying the loan amount within the interest free period. Otherwise, after the 0% phase ends, you’ll be charged an aggressive interest rate and that new sofa, kitchen, tv could end up costing you far more. And it will have a negative impact on your credit score.
Be smart about delivery. Paying delivery fees can really add up. A delivery pass, where you pay an up front fee, for deliveries from your favourite supermarket or even signing up to Amazon Primer just for a month over Christmas, may work out cheaper (just remember to cancel it before the 30 days are up!)
Before borrowing to buy gifts, look at where you can cut costs. Then be honest, close friends and family will be happy to take a rain check on presents or plan something special together in the Spring. You may not have managed to save up for Christmas this year as much as normal, but who has! If you need a credit card, make sure it’s one that offers zero percent interest on purchases. Make sure you pay off the balance as soon as possible.
Don’t lose your head over sales! In the deluge of deals around Black Friday (27 November) and Cyber Monday (30 November) and all the others, remember a bargain’s only a bargain if you were planning on buying it in the first place. Otherwise, it’s just an impulse buy. If you are buying on Amazon, check uk/camelcamelcamel.com – it tracks prices over the year, so you know if you’re getting a real bargain or not.
Plan every meal. Don’t be duped into buying more food than you need. If a ‘buy one, get one half price’ offer is genuinely good value for you, go for it, but if you don’t actually need two of the item, avoid! At Christmas, everyone tends to over cater on the food front. Find frugal swaps, swapping branded products for own-brand and cutting back on food waste can make a significant difference to your weekly food bill.
Use cashback sites to earn money as you shop. Once you’ve set up an account, click on the retailer you want to buy from. You’ll be taken to the retailer’s website to shop as usual. Your purchase is tracked and you will earn a percentage of it back. The amount of cashback you earn varies, but it could be anything between 1% and 12%.
Join the club. Signing up to a retailer’s newsletter can bag you an immediate discount, such as 10% off your next purchase. You’ll also be the first to hear about Christmas discount events.
Save on postage. Use comparison site www.comparecouriers.com.au to check the cheapest way to send Christmas parcels. Enter the weight of your parcel and the destination and it will give you a range of quotes. Plan ahead so you aren’t left with only the most expensive option to get the gift there on time.
Deploy trolley tactics. Load up your online trolley but don’t check out immediately. If stores spot items sitting in your basket, they’ll ask if you forgot to check out and sometimes, they’ll even send you a discount code to persuade you to buy the goods. You’ll need to have entered your email address, so that they can get in touch.
Source: Good Housekeeping
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