Is Christmas 2020 cancelled?
With social distancing, the ‘rule of six’, face masks, quarantine and local lockdowns, coupled with the cancellation of many festive events, it’s easy to see why you might think Christmas has been cancelled. It will certainly be very different to what we're used to.
Despite this, there are steps we can take to make Christmas enjoyable and, more importantly, avoid a financial hangover.
The cost of Christmas
According to the Nationwide Building society, people spent £727 (on average) on Christmas in 2019 – the equivalent of two weeks’ salary for many. Of those who set a budget, 80% went over this limit. Nearly 40% didn’t start with a budget in the first place and 34% turned to credit to cover the costs of Christmas. A total of 10% went into overdraft and 7% got into serious debt.
Start planning now
The key to a successful Christmas is planning. Take time to think about what you’ll be doing and how you’ll be spending the Christmas period. This year may be a little different. You might not be travelling far and wide and there are likely to be fewer people getting together. No Christmas parties so Zoom may be the answer.
Plan for the day, including buying presents, food and drink but also consider decorations and cards. Everyone has their own unique way of celebrating – thinking about it now will help take the pressure off.
Set a budget – and try to stick to it.
Rather than thinking about what you’d like to spend on Christmas, work out what you can afford to spend and use this as a starting point.
If you’re intending to buy gifts, allocate a set amount of money to each person – this will help you keep track of what you’re spending.
Even though it’s a holiday, you still need to budget for your essential household bills or you may find that you’re facing financial problems once the decorations come down.
If your budget is tight don’t be embarrassed to speak to friends and family. Mutually agree not to buy presents or to spend a set amount per gift to keep costs down. Don’t be afraid to ask what people want – 50% of gifts end up being donated to charity, given away or thrown out.
Try a 'Secret Santa' at work so you only buy one small gift. It’s much more fun if everyone sticks to a set budget as this requires more thought.
Download our planner to make a list. Once downloaded you will need to open in the latest version of Adobe Acrobat Reader (it is available to download free online if you don't have it). This will allow you to enter your items and prices and save the document to keep track of your budget. Alternatively print off the budget planner and complete.
Do a stock take of items you already have and ask guests to bring some items if they can. Try not to overbuy – you don’t want to be throwing food (money) away at the end of the festive season. Supermarkets often have deals on seasonal food and drink a few weeks before so buy non-perishables or freezable items when they’re on offer to keep costs down.
If you’re planning (and are able) to travel over Christmas, book tickets early to get the best deals. Advance-price tickets are usually much cheaper.
If you know what you’re looking for, do a price check to make sure you’re getting the best deal. Check out whether there are any discount codes available. Keep an eye on Black Friday and pre-Christmas sales. Remember, it’s only a real bargain if it’s something you want at a cheaper than usual price. Use your loyalty points, unused gift card balances and cashback deals.
Avoid delivery charges. Most online stores offer free delivery if you spend over a set amount, so plan your shopping to avoid hefty delivery charges. If you’re posting cards and parcels, which you may be doing more of this year, do this in good time to avoid extra charges.
To borrow or not to borrow
Should you borrow if you can’t meet the cost of Christmas?
In an ideal world, you should avoid borrowing but we know there’s a huge pressure to spend more than you can afford. So, if you feel you need to borrow, it’s important to look at your options and how much this will cost.
Borrow as little as possible and think carefully about how you'll pay it back, particularly how the repayments will impact on your monthly budget. If you borrow too much you might find you’re facing financial difficulties well into the New Year. It’s best to repay any borrowing over the shortest time possible – that way you’ll pay less interest.
If you have access to an interest-free credit card, use it but make sure you repay the balance within the interest-free period.
Try to avoid salary advances - however tempting. January is a long month anyway, even longer if you’ve been paid early in December. Getting a reduced salary at the end of January could cause financial difficulties.
If you're already struggling with debts, our Money Advice and Guidance team can advise on your options.
Most importantly – enjoy.
Christmas should be a time to relax and enjoy time with friends and family but the strain on your finances can be stressful. With the right planning, you can still have fun on a budget and you’ll thank yourself in the New Year when you’re not facing a financial hangover.
For more useful tips check out our ‘Preparing for Christmas’ webinar.