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How to do Christmas on a budget

How to do Christmas on a budget
Image source: Getty Images.


Planning a Christmas on a budget this year? You’re not alone. 

The typical Christmas is a time of merriment, family fun … and going into debt. According to the Bank of England, the average UK household spends over £800 more in December than in other months due to Christmas shopping and preparations. 

If you’re hoping to cut down expenses this year, we have four top tips to help you do it without missing out on your favourite things. 

1. Write down your usual expense categories

Before you can start working on a budget for the holidays, you need to understand where your Christmas money usually goes. Start with a simple bullet list of all the categories that are part of your Christmas expenses. For example:

  • Christmas cards and stamps, wrapping paper and ribbons, labels and packaging stuff to send gifts away
  • Groceries for a big dinner plus extra food for smaller gatherings, afternoon parties and snacks
  • Indoor and outdoor decorations, including new things for the tree, the windows and the tables
  • Tickets to attend special parties, charity events, holiday concerts
  • Gifts for absolutely everybody you know

Once you have that figured out, it’s time to cut out unnecessary expenses. For example, you can keep wrappings to a minimum, as these are thrown away anyway. Instead, use creative wrapping (like brown paper or a favourite image from a wall calendar) or just tie gifts up with a big ribbon and forget paper bags and wrapping paper altogether.

2. Give thoughtful gifts on a budget

The best way to do Christmas on a budget is to reexamine your gift list. Useful gifts are always better than something that ends up on a shelf. You can’t go wrong with a £5 Costa Coffee gift card, a good £10 bottle of wine, a nuts and trail mix gift bag or some nice tins of tea.

For a slightly bigger gift, get 2-3 months of Netflix or Spotify plus a bag of popcorn. Or get a coffee lover a pour-over coffee starter kit. All of these gifts will cost you less than £50 and many less than £20.

If your major expense is the kids, stick to the “rule of four” when buying gifts for the little ones. The rule of four dictates that you can buy your child four things for Christmas: something they want, something they need, something to wear and something to read.

3. Decorate with what is meaningful to you

You don’t have to spend a fortune every Christmas to embrace the magic of the season. Rather than buying more tree ornaments or lights, spend an afternoon making handmade tree trimmings or decorate using your kids’ Santa artwork. Then add some greenery around the house and bring out some cosy blankets.

Add some candles and play some Christmas music to set up the right Christmas atmosphere on a budget. 

4. Don’t go overboard with food

The holidays often mean tons of food – so much that a good amount of it ends up going to waste or lingering in the freezer forever. If you’re hosting Christmas dinner, create a food budget in advance to avoid panic buying lots of food at the last minute.

Choose a sit-down dinner with an entree and a main dish or serve finger foods. Rather than focusing on a table full of food, cook a couple of nice options and ask others to bring a side dish or dessert.

What next?

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