What to do when you Can’t Afford Christmas

You can’t afford Christmas or any other overly commercialised holiday because you overspend each year. Christmas is a time of year that inevitably involves overspending for a lot of people and needlessly so. A lot of what I see leading up to Christmas are parents posting photos, being modest bragging via social media about the mountains of presents that are sat under their tree for their kids. Nobody needs that many presents.

Despite the annual frequency of this event, December always seems to creep up and usually causes wallets and purses open freely. Year after year this happens and we don’t change. It gets worse if you starting your purchasing on credit. Recent reports have shown that some people just can’t afford Christmas and are still paying it off over a year later. You don’t need to be told, but there’s already another Christmas in that period where the cycle starts again and people are found in never ending debt. This is bad.  All that’s required to get out of this never ending loop is a bit of planning.

Can’t Afford Christmas? Cancel it!

First things first, if you’re in debt, It’s a very good idea to tone down Christmas, or dare I say it, cancel it all together. It’s tough and it’s something that nobody wants to do, but sometimes it’s necessary to help get you out of a hole.

No kids? This should be fairly easy to cancel. Let friends and family know that you won’t be sharing gifts. Or, if you can’t bring yourself to cancel the holiday all together, you could hand make gifts. A lot of thought and effort goes in here which will make for meaningful presents.

If you have very young children, I’d probably say under 2, then they’re not going to notice. As long as they’re fed and loved then they’ll generally be happy. They do not need that new iPad Pro. Honestly! Cancelling Christmas is going to be a lot easier at this stage.

When kids understand what’s happening at this festive time of year, and the belief in Santa is still real, it’s going to be tough to get rid of Christmas. Doesn’t the man in the red suit bring all the presents for free? Why does it matter if you don’t have money? Bless their hearts. Cancelling St. Nick’s visit is probably not going to work. But again, they don’t need that PlayStation 4.

If they’re old enough to know that Father Christmas isn’t real, then I hope you’re teaching them about effective use of money, in which case, I’d hope they understand the situation they’re in. This is not a time to promise double on their birthday to make up for it either!

Can’t Afford Christmas? Plan ahead!

Setting a budget for each person is probably your best bet here. It’s up to you if you have a total in mind that you want to spend for everyone, or if you have a maximum budget per person. But you’re going to need to stick to it.

If you have a total that you know you can’t exceed, divide it by the number of people that you need to buy for.

£300 / 15 People = £20 Per person

£20 Per person seems like a reasonable amount that you could spend per person. You don’t have £300 lying around to go shopping when December rolls around, so you get out the credit card. Right? WRONG! This is why I’m writing about Christmas now, and giving you the chance to plan ahead.

Some people agree with their families and friends that they won’t spend more than a set amount on each other. Some more simple multiplication gives us our total amount

£25 per person x 8 people = £200 total

Again though, £200 may not just be lying about in your bank account, or under your mattress ready to spend.

Can’t Afford Christmas? Shop in advance!

Save yourself time and money while avoiding high street shopping and gambling with shipping time by making Christmas purchases throughout the year.

Make a list of all the people that you need to buy for and keep a note of what you’d want to get them. Buy the items as and when you see them throughout the year and store them somewhere safe at home.

By doing this, you spread the cost of Christmas over the year making it much more manageable. You also make some savings because you’re not buying in the peak period where money grabbing corporations ramp up their prices.

Some people however, enjoy the last minute buzz of high street shopping towards the end of the year. You people are crazy! But there’s an option for you too.

Can’t Afford Christmas? Save through the year!

A lump sum of £300 like above, or more is daunting to anyone. Few people have that money lying around at the moment, but over the course of the year, it’s less likely that you’d notice smaller chunks of money disappearing from your bank account into a savings fund. Did you read my post on Managing the cost of Running a Car? This is the same principal. Spreading the cost of any big financial even makes sense and there’s no reason that you can’t do it for Christmas.

Once you’ve worked out your budget and how much you need to save each month to make it work, you will want to setup a savings account. This can be with the same bank as your current account to make things easier (I use Lloyds and their  sire is so simple) or with a different bank.

Once you have a savings account setup, you can setup a sanding order to transfer the Christmas money the day after payday.

When you decide that you’re ready for the festive season to begin, just transfer the savings back to your current account and spend.

As with all money saving advice, it’s only as good as your will power to leave that money alone other than for it’s intended purpose.

Can't Afford Christmas? How to manage your festive finances

TL;DR – Manage Festive Finances

  1. Assess your budget and decide to cut back or cancel Christmas
  2. Set a budget per person or have a maximum budget set in mind.
  3. Either:
    1. Buy throughout the year and store presents at home
    2. Spread the cost of Christmas by saving a little each  month
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