The Christmas and the New Year holiday should be a joyous time – family, food, and festivities. But the fun can easily turn into financial difficulty if adults launch themselves on a cash splurge they cannot afford.
According to the government-backed Money Advice Service, more than one in three grown-ups are worried about paying for the festive season. Over one million are likely to turn to controversial high interest payday loans to cover costs, with many others maxing out credit cards to pay for Christmas. The Money Advice Service says one in eleven adults is still paying off bills for 2012.
It's rarely one big present that causes financial pressure – rather a series of small items which do not seem much individually, but add up frighteningly. No one wants Christmas to become Stressmas so, if your budget is not limitless, here's my own list of ways to keep seasonal spending under control and ensure a finance fear free festival.
And my seasonal wish is that others do similarly – and avoid those January cash blues.
- I set up a budget. I write down what I spent last year – trying to remember all those little items – and then I work out what I can really afford and calculate what I ought to spend this time. My trick is to be ruthless on expenditure, including small sums.
Do I really need to send a Christmas card to my ex-neighbours who moved ten years ago and never respond? And what about grown up children, nieces and nephews who now have their own income? But as with all budgets, I am aware of “cost over-runs”, so I ensure a reserve – just in case.
- I avoid “present-expense escalation”. If I gave a £50 gift two years and the response last time with one costing £75, I don't want to get into an upwards-only bidding war with something costing £100. As with any arms race, someone has to blink and call a halt. My own present wish list is full of lowish cost items that I would like, but would probably never get around to buying for myself.
- Part of my wish list is setting a cash limit for presents with my partner or other adults. Sometimes we agree not to give each other presents – the more so if all the spending comes from a joint bank account. This way, no one is obliged to buy something for the sake of buying it.
There's no point in buying for eight when there are six to feed or making provision for Boxing Day when you have been invited elsewhere.
- Nearer Christmas, I always set up a daily series of menus before buying food. There is no point in buying for eight when there are six to feed or making provision for Boxing Day when you have been invited elsewhere. This prevents waste and stretches my budget to something better - like a more expensive wine.
- I re-use where possible. Christmas decorations appear low cost individually but the expense mounts up when you do up a whole room, let alone a complete home. Most baubles will last for years. Children can make their own decorations and cards. Try johnlewis.com for a range of crafty ideas.
Thrifty gift ideas
- I sort out children's presents with other family members and buy things together. If a daughter or son wants a computer or games console or tablet, they won't care who it comes from – a parent, grand-parents, or the whole family. Most children (and that includes young adults such as students) prefer something substantial that will last a long time rather than a whole number of smaller gifts that will be forgotten by New Year.
- I am a believer in homemade presents. Last year, a friend gave us three jars of home-made jam heavily laced with brandy - delicious. And the gift lasted well into January. I checked on her garden in September to see if her trees were fruitful. They were. So I live in hope. This year, we're giving spicy chutney to our friends.
- I wish everyone would encourage older children to offer their time as a present rather than spend their pocket money. This can be in the form of a voucher for house cleaning or garden tidying.
- I wish for everyone to remember that there are always people worse off. Giving money to a good cause via the taxman's Gift Aid scheme turns £1 into at least £1.25 for most people. There are no lack of appeals at this time of year. But be extra careful with emails asking for money, some are phoney.
- My wish for those who survive Christmas financially, is to start thinking of next year! I favour saving a small amount each week which adds up over the year so Festive 'Fourteen will be a breeze.