Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money. If you have a question or need help, you can chat to them here.
By Iona Bain,
Young Money Agency
After the year we’ve had, we all want (and deserve) to enjoy the festive season. But in the run-up to the big day, the fantasy ingrained in many of us since childhood of a perfect, magical yuletide can make us throw financial sense out the window. Be it on whopping nights out, food or expensive prezzies, we usually feel pressurised to spend spend spend – and it all adds up. It’s easy to end up feeling broke come January 1st, wishing we’d handled our Christmas finances a little better.
This year, of course, will be very different. It’s likely there’ll be fewer and much smaller yuletide gatherings. We’ll miss our usual stream of banging Christmas parties, and it’ll be hard if we can’t spend time with all our family members. But there is a big upside.
Most of us have taken a hit to our earnings this year and will need to spend less than usual. More Gen-Zers started saving and investing in 2020 than ever before – and it’s a habit many want to carry on into an ever-uncertain-looking 2021. Yuletide normally has a habit of blowing a big hole in your wallet. Luckily this year the pressure is truly off to try and have a perfect Christmas – so why not embrace the opportunity to stay calm, simplify, prioritise, and keep saving?
The pandemic has made us all rethink what and who is important in our lives. Most of us will just be thankful to spend some quality downtime with the ones we love. For the first time in ages, Christmas may not be the gigantic (and wasteful) festival of retail and over-indulgence that it’s become in recent years.
Present budgets will be tighter – meaning you may have to prioritise your gift list and think a little more creatively. Let’s face it – many of the presents we buy are through a sense of obligation, and thousands get thrown away, piling up the festive waste. This year, our collective eco-footprint will probably be much smaller (always something to feel good about).
Fewer parties mean you’ll probably save a small fortune on food and drink – especially alcohol. Normally we get FOMO if we feel like everyone’s out having a good time – and it’s one of the biggest drivers in us to spend more money. This year FOMO is no more! So, if we can’t throw money at the problem, it’s a chance for us all to be more thoughtful and creative in how we make the most of those long Winter nights. Here are some practical tips for hacking Christmas 2020.
Look honestly at your account and decide exactly what you can and want to spend this year. Remember not to dip into your Yikes (emergency) fund. If you’ve started a savings habit this year, ask yourself honestly, is it worth spending it all and starting from scratch in January? If it isn’t, set yourself a reasonable limit on Christmas spends. Then make a shopping budget – this can just be a list with categories for each expense (food and drink, presents etc). When you shop, try and stick to it!
This year, your generosity may need to be more limited than usual. Work out the total amount you can afford to spend on presents, then divide that into the sums you’ll spend on your nearest and dearest. It’s okay if your presents are more modest, and if you’re not able to buy something for everyone in your wider circle of friends or family. Be honest with them – they’ll understand that things are different this year.
Your friends are probably feeling the pinch too, and may be relieved that you mentioned it first! Don’t feel guilty or put yourself under pressure to buy if you need to save that money.
Secret Santa is always a good idea for friendship groups where budgets are tight. Charity gifts are also an excellent feel-good option: Wateraid, Refuge and Save the Children all sell gifts that do real good for as little as £5. Consider whether you could unleash your creative side with a homemade present. If you’re really strapped for cash, you could make some thoughtful cards with specially personalised vouchers promising to spend quality time together in 2021 (‘this card entitles Becky to a fun day out/night in with Emma in January 2021…’)
We all know you’ll likely bag the best deals online, but remember these tips.
Most of us make merry at this time of year by boozing a bit more than we should. Take advantage of fewer big nights out at the pub and have a dryer Christmas. Try to limit drinking at home and take more dry days- you could be amazed at how much money you spend. Even if you only spend £20 on an average evening, 5 less nights out in the run-up to Christmas will save you £100. You’ll feel better and have more energy, too.
After nine long months, is there a phrase that can strike more dread in one’s heart than ‘zoom party’? Sadly, virtual socialising will be the only option to hang out with some of our nearest and dearest this Crimbo. The golden rule: avoid the ‘awks’ moments and keep it fun by having a focus to the party. Try Crimbo Pictionary or a Festive quiz (Name that Xmas song, anyone?)
If you’re travelling home for Christmas, always check ahead for cheaper advance tickets on the train company website/app. This year you really need to get booking as soon as you can, as capacity is so much more limited than usual.
However we do it and whoever we spend it with, the festive season will feel very different for most of us in 2020. After such a hard year, let’s cherish our time with the ones we love and remember what’s important. Stay safe, be kind to yourself, and let’s enjoy it!
Photo by Chinda Sam on Unsplash
Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money. If you have a question or need help, you can chat to them here.
