As the Christmas shopping season kicks off, financial experts are urging UK households to start budgeting now to avoid a financial hangover come January.
With the average household projected to spend around £593.90 on Christmas this year, planning ahead can make all the difference, particularly as living costs continue to rise.
Fiona Peake, personal finance expert at Ocean Finance, says: “December can be a notoriously expensive month, and with many feeling the pressure of higher bills, planning your Christmas budget early can help manage the load. Starting now can help families avoid the panic—and often the higher costs—of last-minute spending, while also making the most of the deals and opportunities available in November.”
Six Smart Ways to Plan and Spread Your Christmas Budget
Set Your Budget and Stick to It: “The first step to a smoother Christmas budget is setting a realistic spending limit now. Look at your monthly expenses and determine how much you can set aside for Christmas without impacting essentials like bills and food. Once you’ve set an amount, break it down by category – gifts, food, travel, and decorations – to give yourself more control over where your money is going.
Consider Using a Credit Card: “Credit cards can be helpful for spreading costs over several months, but they should be used with care. Many credit card providers offer 0% APR on purchases for a limited time, which can provide some breathing room for December purchases, but it’s important to have a repayment plan in place. Applying now, well ahead of the holidays, can give you the best shot at securing a deal that works for you. It can take up to 10 working days for your card to arrive, so don’t leave it too late if you plan to use one as part of your Christmas strategy.”
Keep an Eye Out for Early Deals and Black Friday Discounts: “Holiday shopping doesn’t have to wait until December; take advantage of Black Friday and Cyber Monday deals! This can also help to avoid the December panic-buying rush and raised prices closer to Christmas.”
Earn Rewards and Cash Back Where You Can: “Some credit cards offer rewards or cashback on purchases, which can be an added benefit if you’re planning to make larger holiday purchases. A card with rewards or cashback can help stretch your budget but make sure to always pay off the balance to avoid interest that could outweigh any perks.”
Take Advantage of Purchase Protection: “Many shoppers don’t realise that credit cards offer an added layer of protection on purchases over £100, thanks to Section 75 of the Consumer Credit Act. This means that if a product is faulty or if a retailer goes out of business, you could be entitled to a refund. If you’re making bigger purchases this Christmas, the peace of mind this brings could be valuable. Just remember to double-check the small print and only use it for purchases you plan to pay off promptly.”
Plan for Unexpected Costs: “Holiday expenses have a way of adding up, whether it’s extra travel or a last-minute gift. Keep a portion of your budget for these “just in case” expenses. Having a bit of flexibility or access to credit for unexpected costs can be helpful, if you have a plan to manage them.”
