Updated: Dec 1, 2020
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In under six weeks it will be Christmas. I know. Don't panic, I haven't started shopping either! It can be so easy at Christmas to go over budget, be tempted by Black Friday or Cyber Monday deals and even put yourself into debt to impress your nephew, and buy things for your loved ones. I'm here to help you through the process, and have you budget Christmas, like a boss!
First thing's first, a tip for next year which you're going to start with your January pay... you're going to start a Christmas Sinking Fund. What's a sinking fund? A fund you save into each month so at a target date you have enough to cover an expense. Want to save £500 for Christmas, and want to have that saved by the end of Nov? Simple, £500 ÷ 11 (months) = £45.45. Save £45 a month and on November pay day 2021, you'll have £500 saved!
How To Budget Your November & December Pay
If you've never budgeted before, you might find The Financial Workbook useful, as not only does it go over multiple forms of budgeting you can use, it's also your one-stop-shop for all things personal finance. Click here to find out more.
Need to earn a little more this Christmas? Here's Christmas Temp Jobs List – Lots of Seasonal Jobs To Earn Extra Cash
Now I'm basing this off monthly salaries, however if you're paid weekly, you can join in by x your weekly pay by 52 and dividing by 12 to find your monthly wage. The moment that pay slip comes in and we know how much we're going to get on payday we can start our budget. Write down that number. Then you're going to write down all your bills for the month and the date they come out. These are your fixed expenses, like your rent, mortgage, council tax, gas and electric, phone bill, etc.. Minus these from your income to see how much you have left to live on for the month.
Now we'll start on variable expenses, these are expenses that can change, or are optional. The most important one here is writing a groceries budget. If you know roughly how much you spend a month on groceries, fab, add a bit on to cover the Christmas food shop, and pop it down! If you don't have a clue, print or download your last three months bank statements and go through adding all those grocery spends up to create an average!
Next is an important step if you have savings goals or debt. Note down your savings allocation for the month (it's okay to make it smaller this month to ensure you have enough funds to cover Christmas), and allocate an amount to cover credit cards, loans and any other forms of debt which require a minimum monthly payment!
Useful for you: My 2021 Budget Diary! Stay on top of your budget for the whole year and track your progress towards your financial goals!
After you've subtracted these categories from your income you should have an amount left to pay with in regards to Christmas funds. If you don't have anything, or very little left, go through and work out if there's any categories you can cut from, maybe only pay minimums this month and cut savings goals, cancel that gym membership. One of my absolute top tips to saving money is cancelling all the subscriptions you hardly use!
Once you have this amount, split it between your Christmas shopping needs! Here's an example:
How To Search For The Best Deals
Now we know how much money we have to play with, we can start looking for our gifts! Here are some of my top tips to finding the best deals:
Shop with Independent Retailers - Found something perfect on Amazon? Chances are you can find it elsewhere, most of the stuff on Amazon can be bought via the retailers own store, and often at a discount! Believe me, Amazon is not always the cheapest option out there!
Sign Up For Newsletters - How many times have you gone onto a webpage and a popup has alerted you, you can get 25% off if you sign up to their mailing list? Probably tonnes.. well, this is the perfect time to utilise these discounts! You can always unsubscribe from their emails at a later time.
Leave Your Basket a Day or Two - Another trick stores like to hit you with is giving you a small discount if you pop something in your basket but don't actually check out.. they want the sale so they'll entice you into coming back. This is another great reason to sign up for the newsletters, if they have your email, they can send you this alert!
Download Browser Extensions - There are loads of extensions you can use that will show you the best offer, discount codes, or best price elsewhere. Here are my Favourites: Honey (discount codes and cashback), Amazon Assist (compares prices on website to amazon prices), and Pouch (similar to honey)
Cashback is when providers offer you money in return for spending. It can be redeemed through cashback sites such as TopCashBack or Quidco (you can get £5 for signing up via my link and earning £5 in cashback), or via another provider which may be your credit card, reward bank account, AirtimeRewards (use code KQHY9UQA for 50p free, woo), etc..
Many retailers are signed up to affiliate marketing networks, this is marketing where a the person bring customers to the retailers site are paid a percentage of the sale as a thank you for bringing that customer. The retailers themselves aren't offering the cashback, but the cashback providers are, they pay you a portion of their percentage from the retailer as a motivator to get you to spend (and thus making them more money) and partly as a thank you for doing so. So at the end of the day you must remember, this is a form of marketing, so only spend money for cashback if you already needed to spend on the item.
So before you go to press the 'checkout' button, have a search on one of the Cashback sites mentioned above, or check to see if your Reward Account or Credit Card offer cashback on the site you're looking to purchase from. It's super easy to rack up the rewards! Hint: TopCashBack also offer a browser extension which will alert you if a site offers cashback!
Be Careful Using or Signing Up for Store / Credit Cards
There will be times you come across a notification telling you that if you open a x% APR credit card or account with us, you'll get £x or x% off your purchase. Please, only utilise these offers if they are right for you and you can afford to do so.
Check your credit score. Taking out a new line of credit will negatively affect your score for a time. Also, the lower your score, the higher the interest rate you're likely to be offered, which means higher repayments if you don't pay off in full right away.
Do you already have debt? If you already have large amounts of high interest debt, and are struggling to pay it off, now is not the time to be opening new lines of credit. You will likely not be able to pay it off right away, and be charged high interest rates.
Work out the interest rate. Understand the APR (annual percentage rate, usually interest plus any additional fees). If you want to go forward with one of these offers, and know how long it will likely take you to pay it off, work out exactly how much interest you will pay on your purchase and calculate if it will actually be cheaper than buying outright.
Christmas Shopping can be a stressful time for some of us, but it needn't be. You don't need to break the bank to show that you care. If you are struggling for money, please talk to your family. Money can be a taboo subject, but your family love you and don't want you to suffer financially for a commercialised holiday. Why not check out these 7 Great Ways To Show You Care Without Spending Money.