Every Christmas I try to set a budget for my spending, but I usually end up panic buying at the last minute and spending far more than I can afford.
Turns out I’m not alone. According to Halifax, 37% of people have had to dip into their savings in the past three months, withdrawing on average £1,186.
A separate report from Nest shows that 77% of people are concerned about the cost of Christmas and 52% think they spend too much. It says over our working lives we’ll spend £20,072 on Christmas – working out at an average of £445 a year.
But just how true are these statistics and does anyone really spend that much? I asked the team at lovemoney to reveal how much they’re planning on spending on the day.
The lovemoney team
Ed Bowsher, Managing Editor of lovemoney, has set a budget of £160 for presents and £50 for taxi travel. He’ll be getting a free Christmas lunch but will spend an extra £70 over the festive period on food and drink bringing his total spending to £280.
Editor John Fitzsimons is buying presents for around 20 people so will spend between £300 and £350 as a family on these. Instead of spending lots of food and drink out and about at this time, he’ll be making Christmas dishes at home so will spend no more than around £30.
When it comes to travel this will be by car around different family homes so shouldn’t cost more than £20, so as a household Christmas spending will be approximately £375.
Simon Ward, our News Editor, is trying to limit his present spending this year, particularly in terms of the gifts between him and his wife. He’s also managed to get some presents for his two kids in charity shops, including one for next year – a fairy castle worth more than £100 new which he picked up for just £10.
As his in-laws are staying for Christmas, food and drink will be the biggest expense especially as he’ll get meat from a local farm shop rather than the supermarket. The one real treat he insists upon is a real Christmas tree and so his family Christmas budget is around £250.
Writer Reena Sewraz is splitting the cost of Christmas with her boyfriend and they have spent £240 on presents, or £120 each. Couples in the family get one present and children get the most spent on them, such as the Avengers Assembles action figures for £30 for her nephews.
Travel will be driving between London and Reading so £40 on petrol, and food will be free as she’s at her brother-in-law’s for Christmas Day. Therefore her total spend should be around £220.
Finally, I’m attempting to be a bit more frugal this year by making piccalilli for everyone I know. It’s a cheap homemade gift and for my immediate friends and family I’ve spent around £150 in total on bought presents.
Travelling back to my parent’s house is another £30 on top of this and as I’ll be at home for Christmas lunch will be free.
On top of this I think I’ll probably spend another £80 on food and drink over the Christmas period which puts my budget at £260.
How to not blow the budget at Christmas
The key to not overspending at Christmas is making a strict plan and sticking to it. If you do it in advance you’re less likely to overspend through panic buying and it also makes the whole experience a lot less stressful.
If you’ve got some spare time you could also tackle your own homemade gifts, but with these it’s all about picking something easy to make which won’t cost a fortune. Our article on how to make successful Christmas presents is stacked full of ideas on where to start.
However, if you’ve not had time to pre-plan, there are still some ways to save on Christmas stress and spending. Many shops have started their sales early so you can pick up last minute bargains.
having said that, the key is to only buy what you can afford and avoid the temptation of overspending.
Christmas isn’t just about spending money so if you’re short try and think of other ways to spend time with your family and friends. A night in with board games where everyone brings a different dish is a good idea and there are lots of bargains to be had when it comes to Christmas food and drink.
Lastly, resorting to a payday loan or going into your overdraft for your festive spending is one of the worst scenarios and will leave you with a massive financial hangover in January. There are lots of other ways to pay for Christmas before going down these routes.