It’s looking likely that Christmas 2020 will be a very different celebration for all of us thanks to Covid-19 restrictions.
And on top of lockdowns and social distancing, many of us have had our incomes reduced due to redundancy or cuts in pay or working hours.
So lots of people will be wondering how on earth they’re going to pay for Christmas.
Even before the pandemic, for too many years (25!) I found myself in this situation.
I learned the hard way that to prevent a post-Christmas financial meltdown, it’s essential to set a budget, stick to it and track spending.
It’s the only way to avoid that sinking feeling when bills arrive on the doormat in January.
Please don’t feel that cutting back on your spending is ‘bah humbug’.
I used to think exactly that, but now I realise it’s so much easier to get into the festive spirit and enjoy Christmas if you’re not desperately worried about how you’re going to pay for it all.
Christmas is meant to be fun, not a headache!
If you do nothing else, I suggest you create a proper plan and only spend on the aspects of Christmas that are most important to you.
Forget the rest unless you happen to have some spare cash left over.
My other recommendation is to get support if you’re struggling with debt.
The earlier you speak to the companies you owe money to the better – and they may be able to help you get control of your finances with a new repayment plan.
There are options for every situation and there are independent people out there who can offer free advice, such as Citizens Advice and Stepchange.
Here are my top tips for avoiding a Christmas debt hangover:
Agree not to give (as many) presents
How many people do you buy presents for because it’s what you’ve always done, or they bought you a gift once and you feel obliged to return the favour?
Admit it, I bet there’s a few of these on your gift list!
While you struggle to decide what to buy these people (and groan at the extra cost), odds-on they’re thinking exactly the same thing.
So what’s the point, really? Everyone ends up spending money they haven’t got – and on things no one really wants. It’s silly when you think about it.
I suggest you speak to these people as soon as you can and agree not to exchange gifts this year.
The hard times we’re going through is a valid reason to give for cutting back, and you’ll find most people are more than willing to save time and money themselves.
Set a budget
Hardly anyone knows what they spend on Christmas and most people would be shocked if they actually totted it all up.
It’s vitally important to work out what you can afford to spend and, from there, decide how much will go towards presents, food, decorations and other festive spending.
It’ll show you where you need to cut back and force you to think about what’s most important to you.
Of course it’s a waste of time if you don’t stick to it – so make sure you track your spending and refer to your budget every time you’re considering buying something.
Look for bargains
Save money by shopping around and comparing prices on re-selling websites like Facebook Marketplace and Ebay.
While you’re there, you might want to try selling your own unwanted items to boost your Christmas coffers!
Also check if you have a stash of loyalty points on your Tesco Clubcard or Nectar card – they could pay for your Christmas dinner.
Check critics’ reviews of this year’s supermarket Christmas food – cheaper brands often get rave reviews, proving you don’t have to break the bank on luxury festive food.
If you’re doing your Christmas shopping online (let’s face it, all of us will be this year!), consider joining a cashback website and earn a few pence – or even pounds – on your purchases.
Spend time, not money
Your time is the most valuable present you can give. Children’s enduring memories of Christmas often relate to extra time spent with family and friends.
It might not be possible to meet up with extended family, but, after the year we’ve had, it’s even more important to spend quality time with those we live with.
Check out our tips and introduce some low-cost Christmas traditions that will help create some Christmas magic for both children and adults.
Cash rather than gift cards?
On a final note specific to 2020, it’s worth thinking carefully before buying gift cards.
Various large retailers have been forced to permanently close their doors in recent months – and when a company goes into administration they usually stop accepting gift cards.
As you often can’t get your money back in this situation, giving cash could be a safer option – after all, you want to be sure your recipient will be able to use their gift!
I hope you manage to keep control of your finances this festive season – remember, even if you make one or two improvements this year, it’s a step – or maybe two – in the right direction.
Good luck – and have a merry but affordable Christmas!