Managing your Finances at Christmas

It is a fact that overindulging comes with the Christmas territory. However, a substantial amount of food and drink is often matched with overspending, seeing the first part of the New Year turning into a damage repair exercise for our budgets (as well as our waistlines).

Here at Magenta, we have below created some top tips for Christmas budgeting; an exercise that can benefit businesses and individuals alike.

Make a List – and check it twice

Make a list of all your family and friends who have been good girls and boys. Once you have decided who is deserving of a gift from you, determine how much money you can realistically afford to spend. Then, designate a set portion of the total amount for each person on your list.

For example, let’s say you have £600 to spend, and you need to buy gifts for ten family members and five friends. You may decide that you will spend £40 on each person on the list. On the other hand, you may want to spend £50 on each of your family members and £20 on each of your friends. No matter what, stick to your initial budget, and don’t spend money you don’t have.

Make sure this budget is on top of your ordinary budget for the Christmas months, so you know that you can manage the overall effect Christmas spending has on your day to day.

Don’t make budgets too big

It’s not necessary to spend lots of money to give a gift that someone really wants – try and curb budgets or go in as a group with other siblings or friends to minimise spending, but still get a gift that is memorable for the recipient. Spending hundreds of pounds won’t make Christmas time any more fun, in fact may just make others feel under pressure to match you!

Secret Santa’s work well with groups of friends – or how about a Christmas Sock exchange party! Everyone brings a pair of Christmas socks filled with goodies!

Don’t waste money on gifts that are never used!

Try and avoid things like; Balloon Trips – because they will expire long before the weather is good enough and you can find a date that suits you, and Women’s Clothes – the most returned item after Christmas according to the post office.

Keep a running total

Keep a close check on your spending – maybe by compiling the running total on your mobile phone or in a spreadsheet – especially if people are meant to be repaying you for buying a gift on their behalf! This way when bills will come in after Christmas you’ll be better placed to manage them.

Pay in cold, hard CASH

One way to force yourself to stick to your Christmas budget is to pay for all your gifts with cash. Simply withdraw the amount that you can afford to spend on your holiday gifts. When that money is gone, Christmas shopping time is over. Try not to use credit where possible, it’s very expensive and promises to repay in the New Year usually don’t come to fruition.

Become a Lone-Wolf Shopper

People who shop alone generally spend less money than those who shop with friends and family members. Not only can a shopping partner cause distraction and break your fiscal focus, but they may also pressure you into buying items you really don’t need, or you will be more inclined to impulse buy because you don’t have time to make a decision.

Get Creative

Consider giving out non-monetary gifts! For example, you may offer to paint your grandmother’s kitchen or babysit your best friend’s son. Maybe consider making homemade presents, knitting, baking or making chutney. Or how about a gift of a meeting with a financial planner?