Saving For Christmas
‘Christmas comes but once a year’, every year, whether you can afford it or not. Despite Christmas being on the same date every year, it often ends up being a last minute rush that hits your finances hard. So how can you make sure that you can afford it?
START SAVING EARLY
The earlier you start saving for Christmas the better. The longer you have to save for Christmas will mean that the regular amount you put aside for it will be lower and, therefore, have less of an impact on your usual living expenses.
The best time to start saving for next Christmas is straight after the one you’ve just had. Once all the festivities are over and you get paid again in January it’s time to prepare for the next one. It may sound a little premature but it’s surprising how fast Christmas seems to come around again.
Don’t panic though. If you didn’t start saving in January you can start saving now. Get your calculator out and set yourself a savings budget within the time you’ve got left.
START SAVING EARLY
The first thing you need to calculate is how much each week or month you can comfortably afford to save for Christmas. Allow for when you want to start your Christmas shopping, the beginning of November for example, and make that your cut off date for your savings budget. Calculate the total you will have saved by your cut off date. You now have your Christmas budget total. Any extra money you can save after that is a bonus and will no doubt come in handy.
Once you’ve worked out how much money you can afford to save each week/month for your Christmas budget you will need to decide where you are going to keep the money.
CREDIT UNIONS
Credit Unions are usually local not-for-profit organisations that help people to save and also offer low interest loans. You will need to check to see if there is one in your area that you can join.
Some Credit Unions offer a Christmas Savings Scheme. You need to start saving early in the year for these. You save a regular monthly amount which is held until a few weeks before Christmas, then it’s paid out so that you can do your Christmas shopping in time for the big day.
You may earn extra money on your savings for being a loyal and regular saver. If you save with a Credit Union your money should be protected by the Financial Services Compensation Scheme in the event that the Credit Union goes bust. And because your savings are paid out to you in cash you will be able to spend it in the stores of your choice.
CHRISTMAS CLUBS
There are Christmas Club companies that you can sign up with online. Christmas Clubs can also be run by local shops, social clubs and community groups and some national retailers.
You need to start saving a regular monthly amount early in the year for these. Your savings are locked in until a few weeks before Christmas. Most Christmas Clubs of this type don’t usually pay out your savings in cash. The payout is usually done in vouchers, gift cards or in goods/services from a catalogue, website or within a specific store.
Vouchers and gift cards can often be used in several different participating stores but you will need to check before joining the Christmas Club if these stores are likely to have what you will want to buy. You should also check to see if the club has any financial protection in place in the event of the club going bust.
EMPLOYER SCHEMES
Some employers have a Christmas Savings Scheme for their employees. You set the amount that your employer will automatically deduct from your weekly/monthly wages and it’s paid out a few weeks before Christmas. You usually need to start saving at the beginning of the year to participate in a works Christmas Saving Scheme.
The payout may be in cash but is more likely to be paid out in vouchers or gift cards to be used in participating stores. Make sure you check the details before joining the scheme as once it starts your money will be locked in until the payout date. It’s also worth checking what financial protection is in place in case the company or the scheme they use gets into financial difficulties.
PIGGY BANK
A traditional way to save is by putting your money in a ‘Piggy Bank’. It doesn’t have to be piggy shaped though, you can use any container you like. You can even buy money saving tins that have to be opened with a tin opener so it makes you think twice about raiding it. Put your weekly/monthly amount into your piggy bank and store it somewhere safe. If you’re not happy about keeping cash in the house or you think the money will be too tempting it might be best to have a look at the other options for saving for Christmas.
BANK/BUILDING SOCIETY ACCOUNT
Saving money for Christmas in a bank or building society account may earn you interest on your savings and your money will be protected. If it’s an instant access account you will be able to get at your money in case of emergency or to buy gifts throughout the year when you spot a bargain instore or online.
Some building societies offer a Christmas Savings Account which locks your money in until a few weeks before the big day. As the payout is in cash you will be able to spend in where you choose. You usually need to set up and start saving in one of these accounts early in the year. Speak to your bank or building society for advice on what types of savings accounts they have available or do a little research online.
SUPERMARKET AND RETAILER SCHEMES
Many of the larger supermarket and retail chains have customer Christmas Saving Schemes. These can be savings stamps, savings cards, a Christmas Club or a loyalty points scheme where you can keep the vouchers/card to use at Christmas time. The schemes will vary from company to company so it’s worth comparing them as some offer an additional top up once you reach a certain level of savings.
Spending your savings will be restricted to that supermarket or retail chain so you need to consider whether you are likely to be able to get everything you need in their stores. You can, of course, have saving schemes with a few different stores, giving you more scope in your choice of food and gifts.
Some schemes may let you to use your savings throughout the year which will allow you to pick up gift bargains as you spot them. Others may tie you in until a certain date before you can spend. Check out the terms and conditions with any scheme you want to join.
MAKE A LIST
You’ve worked out how much you can afford to save each week/month. How long you will be saving it for and where it will be kept until it’s time to start Christmas shopping. So now you have your Christmas budget total the next step is to write your Christmas List.
Make a list of the people who you usually buy presents for. Now take a good look at the people on your list. Ask yourself if it’s really necessary to buy for everyone on the list. This may sound a bit ‘bah humbug’ but it really isn’t.
We often buy for certain people out of habit. Like the people you rarely see or don’t spend any time with during the year. They send you a nice card but you’ve continued sending them a gift. I know we shouldn’t give to receive but they’ve obviously chosen to make cutbacks to their gift list, so you shouldn’t feel guilty about doing the same. It’s also possible that they have been feeling bad that you send a gift and they send a card.
As families have a habit of expanding over the years your Christmas list will keep getting longer. Unfortunately, your budget is unlikely to expand at the same rate as your list. So what can you do?
If you have a large number of children in your family, which will include your own if you’re a parent, have a chat with the adults. Suggest that you all only buy gifts for the children and the adults will exchange cards. You may have adult family members that don’t have children, or older relatives that you are particularly close to, and you may still want to buy them a gift. Either way, get together with your family well before the big day and come to an arrangement. You may be surprised to find that they welcome your suggestion and were probably thinking along the same lines.
If you have friends that you buy for every year why not suggest just exchanging cards or at least set a cost. If your friends have children that you buy a gift for, and they buy for your children too, agree on a maximum amount that is spent on each child.
Family gifts are good way to give and also to save on cost at the same time. By sending a gift for the whole family to share or participate in, such as a fun board game or family movie, you will also be giving them the gift of quality time together. Couples often have shared hobbies and interests so you could send the couples on your list something that they can enjoy together.
So now you have your list of people or groups to buy for you need to look at your Christmas budget total. You need to stay within your budget to make your Christmas affordable and to avoid starting the New Year in debt. Allocate each person/group a maximum spend portion of your budget and write the amount next to their name or group. You may want to spend different amounts on different people/groups, so you need to make sure the overall cost equals your budget total. Don’t exceed the amount that you have allocated each one, that way you will keep on target.
Food, drinks and snacks are another important part of celebrating Christmas. It’s a good idea to add them to your list and allocate them a portion of your budget. Deduct the amount you will spend on these from your budget total, the amount left over will be your gift budget to portion and allocate to the people/groups on your list.
Don’t be tempted to write your Christmas gift list with what you will spend on each person before working out your Christmas budget. If you do things that way round you will probably be setting yourself a financial target that will leave you in debt come the New Year. You are more likely to allocate amounts that you would like to spend on each person rather than what you can actually afford to spend. Remember, set your budget first then allocate your funds.
MAKE MONEY FOR CHRISTMAS
You can make some extra money for Christmas by selling your unwanted stuff. Depending on the time of year, you can sell your unwanted items at car boot sales or table-top sales You can also sell your things all year round on eBay, Facebook, Shpock and other selling and social media sites.
There are websites where you can sell your unwanted smaller items such as DVDs, CDs, Console Games and Books. They usually offer free postage and/or free collection from your home and, of course, will pay you for any items they’ve agreed to buy from you. Payment may be by cheque, bank transfer or PayPal depending on the particular company. Do a little research online and see what is being offered.
Selling-on the things that you no longer need or want is also a good way of creating space in your home ready for all the lovely Christmas presents you will receive. Keep any money you make to top up your Christmas budget. Extra cash is always handy at this time of the year.
