Have a Financially Happy Christmas! 🎄

You may be wondering why we are talking about Christmas in mid-November, but let’s face it, Christmas has been in the high street for at least a month.

In two more weeks, we’ll be bombarded with Black Friday offers to ‘pick up a bargain’, so now is the time to start thinking about it. You can save a small fortune by planning now during the festive season.

With all the financial ups and downs we’ve had so far this year, it’s even more important to consider how we can afford a Christmas that will make everyone happy. And, in our opinion, it’s never too early to start!

Rising energy bills and food costs mean many of you might want to have a thrifty holiday season this year. So, to get the best out of creating a Christmas budget so you can avoid starting the new year by paying off your Christmas debt, we have some rules for you.

If you have the decision to make about your spending, these rules will be your backup:

Rule number one: Remember the real joy of Christmas and use this time of year as an opportunity to celebrate family, reconnect with old friends and build relationships in your community. Christmas is a time to celebrate human values, and, at the end of the day, money and possessions aren't the paths to happiness - friendships and connections are. 

Rule number two: Plan how much you will spend on Christmas this year and stick to it. The amount you have available to spend will depend on how much you put aside after your bills and essentials are paid each month. It’s never too early to start saving and the sooner you start the less you need to put aside each month. Planning your Christmas budget is easier if you do a little research: you can assign an amount to each person you are buying for, as well as a separate budget for food and drink.

Rule number three: If you are planning to host, create a guest list and stick to that too! For some, having a house full of people at Christmas is a joy, but it can be expensive. You should allow an amount per guest in your budget, and it can mount up quickly: especially if alcohol will be served. 

Rule number four: Track your spending. Each time you make a purchase - whether it’s a gift, a bottle of wine for the festive period, or a cute little outfit for the dog - write it down. You don’t need a fancy app (unless you want one!). You can use a spreadsheet on your computer or phone and tot up how much you have spent each time you buy something. It’s so easy to forget what you spend if you don’t make a note of it – it’s the easiest way to bust your budget wide open!

Rule number five: Don’t borrow for Christmas. It’s much better to budget over the course of a few months or a year than pay back borrowed money with interest.

Discuss with your family and friends the budget you have, and maybe you can agree with some to hold off buying for each other until next year. Talking to your children about it doesn’t have to be scary for them – you don’t have to tell them about rising costs and the energy crisis, for example. However, getting them involved early in creating a list of things they want that won’t break the bank will give them a sense of responsibility. 

Sticking to these five essential rules doesn’t mean you can’t move money around within your budget.

If you manage to find that perfect gift for a friend or family member that costs less than you have budgeted for, don’t be shy about moving the rest of the money around to spend elsewhere.

With a touch of willpower and help from your family and friends, you’ll be heading into Christmas and the new year with a clean slate. And, we’re hoping, the desire to start all over again – earlier this time!

Money saving ideas for your household

With the rules firmly set, here are our top tips for saving money at Christmas:

• Do your research: in the run up to Christmas you’ll see discounts popping up everywhere, from the big online retailers to your local shop. Keep your eyes open for early bargains and stash your presents away for the big day.
• Ask for Christmas lists early: If you already know that the kids want the latest games system or your Mum is dreaming of some fine porcelain then you can be ready to snag it on Black Friday and save a bit on the big ticket items. 
• Forget Secret Santa. We know, it seems harsh, doesn’t it? Christmas is a fun, gift-giving time, but do you really use that big novelty pepper grinder you got last year in your office round of Secret Santa? It may be hard to break the habit, and some people will be miffed you made the suggestion, but why not ask to do a shared lunch instead? You can all put in a lot less money than the usual £10 people often spend on something that will never get used! 
• Don’t be afraid to hit the charity shops. Although only 8% of the population were set to buy second-hand gifts last year, second-hand or vintage pieces found in charity shops are all the rage these days. You can often find a bargain, especially when it comes to books. Most charity items are well presented and a fraction of the price of high street or antique shops. 
• And speaking of bargains, check out eBay for unwanted gifts that people are selling on. You’ll find lots of items that are brand new and unopened, selling for well under the usual retail price. And if you need some money to add to your fund, think about selling your unwanted items online. Take advantage of free listing time from online marketplaces like Facebook or eBay.
• Get your craft on! Those little stocking fillers for the family can often be the worst culprits for blowing the budget, especially if you aren’t tracking your spending. Gone are the days of a packet of sweets and a satsuma! In 2020 the average household spent £45 on stocking fillers, which is £873 million across the UK! We can save a lot in this area by making a few things. But don’t worry - you don’t have to be artistic. A few simple treats like snowman soup are a great treat for kids. For hundreds of ideas on how to save money on your stocking spend, try PrudentPennyPincher.

Think differently about business gifts

Many companies use gifts at Christmas as their way of thanking people they work with and to show appreciation for their business. From personalised water bottles to corporate hampers, there are many ways to spread the love at Christmas. 

You may be watching your business Christmas spending this year as well and thinking about the bigger picture: helping others and protecting the environment. If this is the case, why not consider giving to charity on their behalf. Many charities offer Christmas-themed opportunities that suit any budget - click here for ideas.

Charities will be able to claim gift aid on your donation and it will most likely be tax-deductible, so check HMRC’s overview of donation tax relief.

The SmartPurse January Challenge

We love a challenge here at SmartPurse HQ, and we’re busy lining up the next one to see us into the new year. We want all our readers to head into January 2023 without any extra debt. So, if you’re up for the challenge, stay tuned for our invitation to join us in welcoming next year with a financial freedom plan.

Figure of the Week

3.1 million people spend more than £800 on presents        

Although we may be thinking of cutting costs again for Christmas, the amount of money we spend increases year after year.

According to Mintel, the average spend on gifts grew by 9.6% in 2021 and is set to increase again this year. Much of the increased spending was by those aged 35-44, with families wanting to make Christmas something to remember after the effects of the COVID-19 pandemic. 

Money School in the App Store

The Smartpurse's Money School App is a great way to plan your financial future, with bite-sized lessons and practical help. You can register here for your ultimate financial toolkit.

No strings attached - try it for free with a 7-day trial and only £7.99monthly afterwards. 

Meet the expert – Ilana Jankowitz

Ilana is a certified money mindset coach and NLP practitioner. She is also the founder of Mindful Money Coaching and specialises in helping women in business unblock their issues with money to gain knowledge and insight to bring abundance to their lives.

You can find out more about Ilana here.

“I make use of many fascinating tools and exercises in my coaching. Each one is designed to support my clients with the inner work required to understand how their money stories were created.”

Live courses and events

Are you curious about a digital economy and why it requires new currencies?

If your answer is ‘yes,’ join us for this free metabinar, led by wealth management and technology expert Urs Bolt, to find out more. Urs will answer many of the common questions surrounding digitalisation and its effect on society and our economy.

Sign up now to learn more about the future of money, and join us for this insightful event in our Metapurse Studio! You can easily access this event using VR glasses, via computer (we recommend using Chrome) or simply through a Spatial app on your phone or tablet.

Looking forward to seeing you there!

*Wondering what a Metabinar is? This 3D immersive take on a webinar allows you to join us in the metaverse (Meta + -binar – see?) and get a much more connected experience during the presentation.

Money Inspiration 

We love hearing from you. Send us your comments and feedback to: 

team@smartpurse.me

Always remember to consult an independent financial advisor for personalised investment advice.

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