MoneySuperMarket offers some top tips to help you financially prepare for this year’s financial season.
With Christmas on the horizon, getting your finances in festive shape will save you additional stress and financial pressure.
1) Make savings by cutting back on non-essentials
There may be only one or two pay packets left before Christmas if you’re paid monthly. However, it’s not too late to start saving for Christmas this year. Cutting back on non-essentials where you can and putting some money aside now can spread the cost of the festive period and help you reduce the burden of having to solely rely on your December salary to pay for everything.
MoneySuperMarket has launched a Christmas Saving Calculator to help people work out how much they want to spend, and how much they will need to save to afford the Christmas they want.
2) Once you’ve set a budget, stick to it
Although for many people Christmas may end up being a smaller affair than usual. Depending on what happens with restrictions, even if you celebrate with only your own family, you will likely still want to spend money on buying and sending presents for family and friends. So budgeting is still important to avoid ending up in debt.
Research by MoneySuperMarket*has shown that half of Brits (50%) will be setting a Christmas budget. 20% are committed to not exceeding their budget, while 30% will set a budget but expect to go over it. Two fifths (42%) will not set a budget but are confident their spending will not get out of hand. While it can be tempting to really treat loved ones with expensive gifts at Christmas, especially when you may not have seen each other as much.
The golden rule of festive spending is to know your budget, and then stick to it.
Keep a running total of your Christmas spending so you know how much of your budget you’ve spent. Getting swept up in the festive cheer could leave you starting 2021 in the red.
3) Cut back your Christmas list
If your list of people to buy for is spiralling out of control, consider speaking to friends and family about cutting back, and potentially even introducing a ‘Secret Santa’ scheme whereby you select one person each to buy for. Alternatively, how about making your own, small, personalised gifts, or baking some sweet treats. After all, Christmas isn’t about how much you spend on presents, it’s the thought that counts. Or perhaps this is the year to substitute present buying with a charitable donation for a worthy cause?
4) Try not to borrow for Christmas – but use a 0% credit card if you do
If you haven’t managed to save this year a good way to help spread the cost over a longer period is to shop around for a credit card offering zero per cent interest on purchases.
Make sure you pay off the balance as soon as possible and borrow within your means. Or you may find you will still be paying off this year’s Christmas presents next year.
5) Review existing debts
If you already have credit card debt across one or more cards that you pay interest on, consolidating your debts by transferring to a zero per cent card could be cheaper and allow you to pay off your debts more quickly.
Just make sure you know when the interest-free period is due to come to an end. Pay off the remaining balance by then as interest will be charged on any remaining balance.
6) Review your household bills
With the colder weather really starting to bite, us all spending more time at home, and many of us are soon to be plugging in our Christmas lights. Now is the time to make sure you’re not paying too much for your energy bills.
If you’ve not switched your energy supplier in the last 12 months, or have slipped onto a standard or default tariff. It is definitely worth seeing what you can save by switching to a cheaper supplier.
7) Make the most of the deals – but avoid impulse purchases
Headline offers, particularly around ‘Black Friday’ can be tempting, but avoid impulse purchases and research prices before you buy – you might find an item cheaper elsewhere.
As many of us will be doing the bulk of our present buying online this year, look out for free standard delivery deals, rather than last minute, next day deliveries which are almost always more expensive.
Mobile phones, in particular, are worth looking at as lots of providers will be offering deals this year. Compare deals online to find the best offer for you.
8) Use a discount code to nab a bargain
There are hundreds of vouchers and discount codes to be found online which can help you make big savings on your Christmas shopping. Try using voucher websites or go to retailer websites directly.
9) Pick a financial gift this year
Young ones may have a Christmas list full of Lego or Paw Patrol toys but why not give a gift that lasts a little longer? Although a savings account in the stocking may be less exciting to unwrap, this can get your children learning about money management early on. Check out more ways you can give the gift of money this year at MoneySuperMarket.
10) Don’t fall into the store card trap
Beware of the allure of store cards. Although the idea of an immediate discount on Christmas gifts or money back may seem like a good idea at the time, the interest rate on purchases is likely to be highly uncompetitive. Remember, although the initial offer may appear tempting, the impact of not reading the terms and conditions could prove costly. Similarly, spreading costs with an online shopping bank such as Klarna should be seriously considered.
This is not free credit and if it isn’t paid off on time, you could end up being chased on it by a debt collector, thus hurting your credit score.
11) Make saving your resolution for the New Year
Adopt a savings mantra early in the New Year and start putting aside money into a regular savers account.
By starting to save as soon as possible it will mean that by this time next year you will have built a tidy savings pot, which will prevent you from funding Christmas with debt.
*All figures based on research of 2000 Brits undertaken by One Poll between 04/09/20 and 08/09/20.
Get your finances in festive shape ready to take on the New Year
We may not know where we will be for Christmas this year, but many of us have already bought all of our Christmas presents by now for loved ones. My go-to is Amazon Prime as I can send gift-wrapped presents direct to people’s houses, without having to go to the post office.
Whether you are still employed, furloughed or like me, now without employment. Christmas is not the time to spend money you don’t have. Yes, we have missed our nearest and dearest this year. However, do look after yourself and prepare to buckle up for the start of 2021.
Christmas trends this year have shown that many of us with face masks and hand sanitisers making a Christmas debut. However, the most important thing is for all of us to get through the last days of 2020.