10 practical ways to manage your money successfully this Christmas

After a couple of years where it’s been hard to get together with friends and family, this Christmas promises to be a treat.

According to the Bank of England, the average household spends nearly £740 more in December – around 29% more than usual  –  than in a typical month. Presents make up a lot of the expense but spending on food and alcohol also increases by 20% and 38% respectively.

Shops are already full of Christmas goodies, but it’s easy to be left with a New Year hangover if you don’t manage your money successfully. So, here are 10 practical tips to help you look after your finances this Christmas.

 

1. Don’t buy now, pay later

Many retailers now offer the option to “buy now, pay later”. 

Services such as Klarna let you split purchases into several payments, which can seem appealing if you want to spread the cost of your spending. You may also be thinking about using a credit card to pay for Christmas.

As tempting as these options can be, try to avoid them unless:

•There’s no interest charge

•You have a plan in place for repaying the loan within the interest-free period. 

If you don’t have a plan, you could end up paying a substantial interest rate once your “0% period” ends. Your purchases could end up costing you far, far more than you intended.

 

2. Make sure your home insurance covers Christmas gifts

According to research published in the Daily Express, burglaries in the UK double from November to December. And, if all your lovely Christmas gifts are wrapped and under your tree, you’re advertising to a thief exactly where your high value items are.

So, it’s important to be security conscious at Christmas. Your home insurance can help to give you peace of mind.

Many insurers will automatically increase the level of cover during religious festivals such as Christmas. For example, insurer LV= increases your level of contents insurance by 10% over the festive period to protect all the additional items you have in your home. Other insurers increase the level of cover by a fixed sum – perhaps £5,000.

Make sure you have comprehensive home insurance that covers you in full over the Christmas period.

 

3. Plan your meals

At Christmas, it’s easy to buy more food than you need. Much of this may then go to waste over the next few days.

To avoid over-catering over the festive period, try and plan each meal. That way you can ensure that you don’t end up with loads of expensive food waste at the end of the holidays.

 

4. Shop around online

Whether you’re buying gifts, food, or decorations it can really pay to shop around in the run-up to Christmas. 

It can also pay to start buying gifts early when some of the steepest discounts are available. With supply chain issues continuing to affect the UK, leaving it late this year might also mean you’re disappointed.

 

5. Fund this Christmas with the proceeds of last Christmas

Is your home full of things you don’t use? Maybe you still have a lot of unopened Christmas gifts from last year?

If so, consider funding this Christmas by selling last year’s unwanted presents. Online sites such as eBay and Gumtree are great places to make some money from selling unwanted items.

You can also generate income using sites such as Music Magpie. Here, you can “sell” unwanted books, CDs, and DVDs as one job lot, generating some Christmas spending money in the process.

 

6. Get cashback on your gifts

Sites such as TopCashback and Quidco let you earn money as you shop.

Once you’ve set up your account, you simply click on the retailer you want to buy from. The cashback site will then track your order and you will earn a percentage of the amount you spend as cashback. The amount you earn varies between retailers but can be up to 10% in some cases.

 

7. Keep an eye on your online basket

If you know what you want to buy this Christmas, fill your online basket with these items.

Many retailers will then send you updates if your item falls in price. Or you can check in and look at your basket on a regular basis to see if any of your items are on special offer.

Furthermore, if you leave gifts in your basket, other retailers may notice that you haven’t checked out and send you discount codes to encourage you to complete your purchase.

 

8. Embrace Secret Santa

One of the ways that the cost of Christmas can spiral out of control is because of the sheer number of presents you can end up buying. By the time you’ve considered family, friends, and colleagues you can end up buying dozens of gifts.

Secret Santa is a simple and fun way to reduce the number of presents you have to buy. For example, implementing it in your office means you may only have to buy one gift – often with an upper price limit – than something for everyone.

 

9. Start the 1p saving challenge on Boxing Day

While it may not help you this year, save up for next Christmas using the “1p saving challenge”.

The theory is simple. On Boxing Day, put aside 1p in a piggy bank. The day after, you save 2p. The day after that, you save 3p – and so on. By New Year’s Day you’ll be saving a mighty 7p a day!

It might seem like a tiny amount of money, but the pennies add up quickly. If you follow this challenge for a year, you’ll have saved more than £660 by the following Christmas. That’s nearly enough to pay for the average Christmas, according to the Bank of England.

 

10. Protect yourself

Illness or death may not be the most joyful things to think about at this time of year. However, one way that you can guarantee Christmas will be miserable is if you don’t have the right protection in place and something happens to you.

If you were to pass away, could your loved ones enjoy the same sort of Christmas? And, if you were ill and unable to work, could you maintain your lifestyle on a reduced income?

If you want to make sure that your Christmas is the best that it can be for your family – whatever happens – then it’s vital you put the right protection in place.

Life insurance can cost as little as £6 a month – the cost of a couple of nice selection boxes. Critical Illness cover and income protection can also be extremely cost-effective and ensure you receive financial support if you’re diagnosed with an illness that keeps you off work.

 

Get in touch

Having the right insurance in place gives you the peace of mind that your loved ones are protected when things don’t go exactly as expected.

We work with dozens of the UK’s leading insurers to help you get the cover you need at the right price. We can save you money on your cover, leaving more in your pocket to spend on treats this Christmas.

Contact us to find out more or compare life insurance online now.