Budgeting for Christmas? Let the ghosts of Christmas past, present and future guide you.
Past
The average family in the UK set aside a budget of £350 in December 2020 for Christmas spending, and a staggering two-thirds of people admitted to overspending.
Does this sound familiar? Now is the perfect time to do a bit of self-reflection. Look back at all aspects of your Christmas spending last year; gifts, food, socialising and draw a line between needs and wants to help you stick to your budget this Christmas.
For example, food glorious food! We all tend to buy (and eat) more than we need to at Christmas. In fact, 50% of people in the UK admit to overspending on food at Christmas. A big reason for this is the fear that we don’t have enough to feed everyone, even though one-third of people in the UK said they dealt with more food waste at Christmas than any other time of the year.
A good way to combat this is to write a list, split this list into two columns ‘essential’ and ‘additional’. In the ‘essential’ column list everything you will need on Christmas Day, this will include things such as your turkey, milk and Christmas crackers.
Under ‘additional’ list everything you are concerned you might run out of but is not essential on Christmas day. This means when the shops reopen, as many do on Boxing Day now, you can nip out if needed.
The essential list is your main list, do not deviate from this even if you see a great BOGOF. Unless it is on your essential list, it is not essential!
Present
This is a simpler one - where are you now and what is your budget? The first step is to work out how much money you have left after all of your outgoings.
Remember that Christmas isn’t just about budgeting for gifts. For example, in a normal month you might spend £50 on fuel, but if you are going to visit family or friends this Christmas, this may cost more.
A good tip is once you have your overall budget, split it into several categories so you know exactly how much you need for each. That way you won’t spend too much on your work night out only to find out you don’t have enough train fare to see your family.
Future
Everything you do this year can help your Christmas budgeting next year. Make a note of what you spent and where.
This is where a budgeting app such as Moneyhub can help you. Budgeting apps will automatically categorise your transactions so you can look at how much you spent on specific categories throughout the festive period.
With Moneyhub you can also customise your budget to match your pay cycle to get crystal clear insight into your spending!
Interested? Why not sign-up to Moneyhub for free today and give it a go!