3 Steps to saving this Christmas
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How to get your finances through the holidays with Ferratum’s Responsible Spending model
At Ferratum we believe responsible lending goes hand in hand with responsible spending. By planning a budget to see where your money’s going you can look at how to make smart savings. This gives you more money to spend wisely in the future. It’s a three-step process you should be putting into all aspects of your life – especially big expenses such as Christmas
Going into December without an idea of where your money’s going can soon turn into a financial nightmare.
We all want a Merry Christmas. Unless you want more chocolate coins than real ones by the end, you have to be smart and start with a plan:
Step 1: Set out your Christmas budget
It’s no good stumbling blindly through the Christmas season flashing the credit card and hoping for the best in the New Year. Take an hour to set out a budget of how much you plan on spending and on what. There are lots of resources online and even mobile apps to help you, but the simplest way to plan a budget is to take a piece of paper and write down every expense you can think of and put them into columns such as household, gifts, food, etc.
Seriously, everything. Decorations, stamps for cards, batteries, a new outfit for the office party. Even the taxi fare to take you home from Grandma’s after a few too many Sherries!
If you have bank statements or receipts from last Christmas, it will make planning a budget even easier. If you don’t, well at least you’re now going to remember to keep hold of them for next year!
Once you have a good idea of how much Christmas is going to cost and where your money’s actually going, you’re ready for the next step – where to cut the costs:
Step 2: Seasonal Savings
What’s Christmas about if not over-indulgence? The trick is to know how much is too much, and how much is REALLY too much! Does a family of four really need a 10lb turkey when a smaller bird or even a turkey crown will feed you all and save room for more of the cheaper (and arguably more delicious) trimmings? How much booze do you really need to stock up on? Remember the shops are only closed for the one day and you can always get more if you need it afterwards.
Don’t go over the top on gifts either. Younger children don’t necessarily need the most expensive, must-have toys of the year (unless, of course, they’re old enough and clever enough to ask for them!) Remember they’ll probably be getting more presents off other relatives too, so don’t let “Santa” get carried away!
Maybe you could agree as a family, to set a price limit on gifts for each other. A well thought, out, cheaper present will always be more appreciated than a last-minute deodorant/shower gel set or a pair of novelty socks!
If you’re organised enough, you could even try getting crafty with your gifts by making your own. Look online for ideas and tutorials such as customised photo frames or turning supermarket brand spirits into unique personalised gifts with a few festive spices and a printed label!
You can also save money on Christmas cards by having your children draw them. Or if you know your way around desktop publishing software you can make your own to be printed on 6”x4” photo prints at the supermarket. You can also save by posting them earlier 2nd class or even by hand delivering them if it’s feasible.
What about leaving the Christmas party early to catch the last train home instead of paying for a taxi? You’ll also save on drinks that way too.
Cutting costs at Christmas isn’t about being a Scrooge. If you’ve done your homework with a budget you can make noticeable savings while not scrimping on anything. All it takes is a little creative thinking and a clear plan. Once you’ve made those savings though it’s important not to waste it. That’s where making smart spending decisions after Christmas really pays off:
Step 3: Spend it wisely and plan for next year
Doing a Christmas budget and cutting costs might not be the most thrilling part of the holidays but the good news is that once it’s done, next time it’s even easier! Take some of that saved cash and put it straight back into next Christmas!
Before the decorations go back up in the attic take stock of what you have and what you’ll need to get next year – and get it now! Christmas Decorations can be reduced by over 50% after the big day so stock up on fairy lights and baubles before the holiday is over. You’ll save money and stress next year when it’s all ready to be put up straight out the box. The same goes for cards and wrapping paper too.
But the best way to save money at Christmas is to save money FOR Christmas. Even if it’s a case of emptying your loose change into a jar every week, it all adds up at the end of the year.
Look into Christmas club schemes where you pay throughout the year to spread the cost of Christmas, or set aside your own savings.
Think of saving for Christmas as another bill – but this one gives you a brilliant rebate in December! Commit to saving the same amount each month by setting up a standing order into a savings account. Putting aside £50 each month from January to November will give you £550 for next Christmas, but try to be realistic. It’s much easier to stick to a tenner a week than aiming too high and giving up altogether when one month you can’t make the £100 you promised.
Extra fourth step: How did you do?
The last stage of responsible spending at Christmas comes in the New Year, and that’s to look back at how you did. How much did you end up spending and how close was that to your original budget? Do you deserve a pat on the back or a telling off? And what are the lessons to be learned for next year?
It’s really important to keep a record of how this Christmas went money-wise. It will give you a starting point for next year and maybe even a challenge to beat it!
From everyone at Ferratum we wish you a very Merry Christmas, and a fruitful New Year of smart spending and responsible borrowing.