With Christmas upon us once again, many of us will be worrying about how we'll afford the myriad of gifts, treats, and parties the season inevitably brings. But with a little planning it is possible to strike a balance between spending beyond your means and being labelled a Scrooge. We show you how.
Make a list
It sounds so simple, but taking the time to sit down and write out exactly who you're buying for, how much you can afford to spend on each person, and who you need to send cards to will instantly make you feel more in control of things.
Having a clear list will stop you wandering blindly around the shops with the vague idea that you need to buy several presents for several people. Instead, you'll know exactly what you're doing and can mark a satisfactory tick next to each name when you've found them the ideal gift.
Be disciplined, too; make a definitive list and stick to it. Try to avoid adding more and more people until your list becomes so long you can't make head or tail of it. Keep your list handy so that when you find yourself with time to spare and shops in sight, you can consult it right away.
Draw up a budget
Writing a Christmas budget may seem like a dull way to prepare for Christmas, but doing so can be incredibly helpful both for keeping a cap on your spending and feeling more in control of what you can and can't afford. Plan how much you can afford to spend on each gift, as well as what you can spare for Christmas food, drink, or party-wear.
Try your best to stick to the budget once you have drawn it up - it will make you feel good knowing that you are buying within your limits rather than spending blindly and dreading your bank statement come January.
As with any purchases, it really does pay to shop around for your Christmas gifts, decorations, food and drink. If you have a particular gift in mind, do your research and check online as well as stores on the high street to compare prices, then go with the most competitive. If you go into a shop and see something you like, don't buy it on the spot - check out a couple of other stores that stock similar items first to see if you can find it cheaper.
As well as finding the best price for your item, shopping around will ensure you're getting what you really want. For example you might want to buy Christmas crackers and decide on the first ones you see - while shopping around might have yielded Christmas crackers with prizes better suited to your guests that match the number of people in your party, and possibly at a cheaper price too.
Put your savings to good use
This doesn't mean blowing all your hard-earned savings on Christmas, but dipping into the funds you've saved up can take the edge off paying for Christmas. Trying to carry your entire Yule-tide expenditure solely on your December income can be a strain, so if you have savings, this may be the time to use them. It's better to use your savings rather than borrow money to see you through to January and go into debt as a result.
If you make a purchase on a 'buy now, pay later' scheme, make sure to make a note of when you must pay for the item and keep a little aside in the meantime so that you are ready to pay when you have to.
If you don't have savings, it's a good idea to start putting some money aside in January so that you have something to cushion the blow of next Christmas - however much you might not want to think about that now!
Say no to store cards
It's very likely that at some point during your high-street Christmas crusade you will be asked at the till if you'd like to open a store card. You may be offered a discount in the region of 10%, which can be tempting, especially if you're committing to a large purchase. However, arguably the best thing to do in this situation is just say no.
Store cards are notorious for imposing interest rates of over 25% on whatever you buy in-store, which is more than most credit cards would charge. The only time you should consider getting a store card is if you can use it to get a decent discount, pay the balance off in full straight away before any interest is added, then close the account. In most cases however store cards just aren't worth it.
If you must borrow money to tide you over until the New Year, make sure you are borrowing at no extra cost.
For example if you decide to spend on a credit card, either get a card that offers 0% interest on purchases or make sure that you pay off the balance as soon as possible to avoid racking up debt you can't deal with.
If you have a cashback credit card then consider using it to fund your Christmas spending so actually make a profit. Do remember to set aside the cash you need to clear it in full once you get your January statement though so you don't get hit by hefty interest charges.
Beware of making purchases on store credit. Many high street stores offer schemes where you can spread the cost of a purchase over several months, even with 0% interest. However this is still a form of credit and you'll have to keep up repayments, so it's not something to enter into lightly unless you know you'll be able to meet each monthly payment.
Finally, remember that Christmas needn't come with a huge price tag. Try not to go crazy and spend money you don't have only to regret it in the New Year - keep it simple and you'll still have a merry Christmas.