Are Brits going to be big spenders this Christmas?

There’s a conversation many of us have each year and if you haven’t had it yet in 2017, chances are it’s around the corner.

Yes, I’m talking about the ‘how much are we spending on Christmas this year?’ chat and whether you dread it or don’t think much about it at all, it’s unavoidable.

Festive spending in 2017

Research from Halifax Bank suggests that some of us will be increasing our festive budgets this year, with one in five admitting that they intend to spend more in 2017 than they did the year before[1]. In fact, 12% splash £1,000 or over to celebrate December 25th and Christmas looks set to cost people in the UK £20 billion this year.

And what are we spending our money on? Unsurprisingly, gifts (55%), the main course for Christmas dinner (43%) and alcohol (31%) top the list.

But is it worth it?

Yes, Christmas is a great time of year for many, but is all the financial stress worth it? One in four told Halifax that they’re worried about festive spending, despite the fact that the amount of cash we throw at the big day seems to get higher each year. Surely, the spirit and enjoyment of the season can be done for less, right?

Coping with Christmas costs

Keeping your financial cool at Christmas and avoiding getting into difficulty is about 2 things: 1) having a savings strategy and 2) knowing how to cut costs.

Saving: It’s unrealistic to think that you’re not going to spend at Christmas; the key is just working out how much and then saving for it.

Top tips

  • Set a budget based on what you can realistically afford
  • Ask how much you can spare to put away each week into a ‘Christmas spending pot’. Is this going to be enough to cover all of your expenses?
  • Look at the financial accounts you have available to you. Do you have any accounts that offer rewards that can be used to contribute to the festive period? Can you get a better deal spending on one card, rather than the other?
  • Cut back where you can. Is it necessary to have that branded cereal, rather than the supermarket’s own, for example? What about that morning takeaway coffee? Can you your own instead?

Of course, one of the best things you can do is make sure you start to save in good time. If you’ve begun a bit later this year than you should have, learn a lesson from it and start earlier in 2018. However, it’s important to remember that it’s not worth getting yourself in financial difficulty just to fund Christmas.

Cost cutting: There are parts of Christmas that can be done cheaper or not at all. Halifax found that the following areas are some of those where we cut back:

  • Christmas cards
  • Wrapping paper and tags
  • Crackers, centrepieces etc
  • Indoor lights and decoration
  • Gifts for work colleagues
  • Outdoor lights/decoration
  • Attending the work Christmas party

If you’re using credit to fund Christmas …

Should you find yourself leaning on your credit card, loan or store credit this festive season, make sure you do what you can to ensure your lines of credit are a help, not a hindrance.

  • Sign into you Noddle account each month to view your payment history via your report when we receive it from your lender. You’ll be able to see if your payments are on track or if they were late, missed, etc. You’ll also be able to view other financial accounts, giving you a better idea about how you handle your money.
  • If you’re planning to take out a credit card or loan, use our matcher services to ensure you’re seeing deals you’re most likely to be eligible for based on your credit score. This will help to reduce your risk of rejection.
  • Make sure you make the required repayments and if you can, it might be worth seeing if you can over-pay.
  • If you think you’re going to struggle hitting repayments on time, talk to your lender as soon as possible.
  • Try to only use 25% of your available credit limit to avoid the risk of your credit score taking a hit.

Smart spending, super Christmas

If you can keep control of your finances over the festive period and reduce the money stress, there’s no reason why Christmas 2017 can’t be a brilliant one.

 

 

 

[1] https://static.halifax.co.uk/assets/pdf/media-centre/press-releases/2017-10-09-halifax-tis-the-season-for-saving-press-release.pdf