After months of rising prices, this fast-approaching festive season may be a daunting prospect for many when we consider what is usually spent on purchasing gifts, clothing, and decorations, as well as nights out or hosting Christmas dinner. For example, the Bank of England estimates that we spend on average almost £740 more in December, which is 29% more than a typical month.
Many of us feel the pressure to buy more than what’s needed or than what we can afford when shopping for Christmas presents and food. Research has found that the average person gets into £439 of debt over Christmas and it takes them 4 months to get their finances back into shape after the festive season. To help employees manage their money over this expensive time of year, WEALTH at work, a leading financial wellbeing and retirement specialist, has outlined some top money management tips for the festive season.
1. Set a budget
Although sometimes seen as a daunting task, creating a budget is the first step towards gaining control of your finances. When budgeting is put into practice it can help someone understand how much they are spending, ensure essential payments are covered and allows them to recognise where they can make savings. Getting into the habit of budgeting will allow you to see where your money is going each month, so that as the festive season approaches you have an idea of how much you are able to spend.
2. Agree a price limit with family and friends
It is easy for people to get carried away at Christmas and spend more than they can afford. Many families and friends agree on limits on the amount to be spent on each other in advance, with some agreeing to only buy gifts for the children, making gifts, or choosing to have a ‘day out’ as a family as an alternative.
3. Utilise online shopping hacks
There are often great sales on at this time of year. However, when looking for gifts online, sometimes an item can appear to be discounted, but in reality, its price was inflated before going on sale. There are several online tools which can help people know if the saving they are being offered, really is a saving! Idealo finds the best price online for a particular product, it also provides the option to set price alerts and view historical prices. CamelCamelCamel can track the price of Amazon products, and allows users to set a price alert when a product drops to a certain price. Browser extensions like Honey search for discount codes when in the ‘checkout’ phase of buying something. Before making a purchase, it’s always a good idea to use all the tools available to get the best price.
4. Consider other ways to reduce costs
When planning food for the festivities pre-made options bought from the supermarket can often be expensive, and it can sometimes be a cheaper alternative to cook a recipe using fresh ingredients. Someone could even try making homemade gifts such as photo collages, cookies or candles which can be cheaper and more personal than shop bought gifts. When it comes to going out, leaving the credit card at home and taking a set amount of cash can ensure there are no temptations to overspend!
5. Maximise workplace benefits
Employees should be encouraged to make the most of their workplace benefits to help save on their festive purchases. For example, many workplaces offer employee discount schemes on grocery shopping and eating out. Some even offer discounts on retailers, allowing for saving on Christmas presents including electronics such as laptops or mobile phone and children’s toys. 20% or even 10% off a festive shopping bill can make a big difference!