10 ways to prepare financially for Christmas

Christmas Laptop

Whilst the latest tech or even a brand new pair of socks are usually welcome Christmas gifts, debt and financial worries are certainly not. But unfortunately, once the excitement of Christmas is over that’s what some of us could face come January.

The good news? With a bit of financial planning, you can avoid the dreaded ‘Christmas debt hangover’ and see in the new year stress-free.


How many people get into debt at Christmas?

So just how bad is the UK’s Christmas debt problem? In 2018, nearly 8 million Brits said they were likely to fall behind with their finances in January due to the festive season*. That’s 16% of the population overspending at Christmas, then struggling to make ends meet in the new year.

From sticking to your budget to finding the best deals, read on to find out how you can financially prepare for the festive season.

  1. Plan early

    It’s never too early to start planning for Christmas – and this includes your finances. From the ever-growing Christmas gift list to how many people you’ll have round for Christmas dinner, getting organised and planning ahead can help you feel more in control from the get-go.

    The sooner you start saving, the better. Put aside what you can afford each month in the run up to Christmas – it’ll make setting your budget (see tip 2!) much less daunting.

  2. Set a budget

    This is probably the most important thing you can do to keep your festive spending in check. Once you know what you need to buy or budget for, it’s time to be realistic about how much you can afford to spend. Write everything down to keep yourself on track and don’t forget to include hidden costs, like food, decorations and travel to visit family and friends.

    Sticking to your budget is just as important as setting it. While it might be tempting to overspend – especially when you’re in the festive spirit – you might regret it in the new year.

  3. Keep paying your monthly bills

    It might sound obvious, but don’t forget to factor your monthly bills – such as your mortgage or rent, utility bills and phone contract – into your Christmas budget.

    If you get paid early in December, try to pay your regular bills as soon as you can so you don’t spend the money on something else. If that’s not possible, you could move it into a different account instead.

  4. Look out for deals and freebies

    Another benefit of planning ahead for Christmas is that you’ll have time to shop around to find the best deals. This could mean switching from your regular supermarket to one that’s better value or hunting down the cheapest place to buy the perfect gift for your loved one. Being a savvy shopper can make a big difference to your festive spending. Do you think you’re a savvy shopper? Click here to find out what kind of shopper you are.

    Don’t forget to look out for freebies too. There can be a lot of pressure at Christmas to take part in expensive activities, but there are plenty of ways you can spend time with your friends and family for free. Check out online listings to see what’s going on in your local area, arrange a trip to a nearby park, or simply take a stroll and admire the festive decorations. 

  5. Shop online

    It’s very easy to get caught up in the excitement of Christmas lights, festive songs and ‘too good to miss’ deals when you’re out shopping. But by shopping online you could find it easier to stick to your list and avoid those tempting impulse buys.

    Christmas shopping

  6. Plan your Christmas dinner

    Aside from gifts, one of the biggest expenses at Christmas is feeding your friends and family. Plan your menu and buy what you need as early as you can, so you don’t have to make any last-minute dashes to potentially more expensive shops or supermarkets. Don’t be afraid to ask your guests to bring drinks, Christmas crackers or a dessert to help keep your costs down – they’ll probably be happy to help.

  7. Spread the costs

    The more you can do to spread out the cost of Christmas, the better. The solution? Buy as much as you can – like gifts and non-perishable food – in the months and weeks leading up to Christmas. This means everything doesn’t have to rely on one payday.

  8. Spend sensibly (and borrow responsibly)

    Don’t be tempted by festive spending fever – resist the urge to spend money unnecessarily. It’s much better to live within your means than head into the new year with financial difficulties.

    That being said, if you do need to borrow a little extra in the form of a loan, make sure you do it responsibly. A loan is not just for Christmas so make sure you consider what you’ll use the loan for, what you’re committing to and whether you can afford the repayments – not just now but in the future, too.

    When comparing loans, make sure you look out for lenders like us, who offer a ‘soft’ credit search to see whether you’re eligible without affecting your credit score. At Shawbrook we provide you with a personalised quote upfront so you can compare it to other lenders and decide which loan is right for you.

    Finally, whether you have an existing loan or are thinking about taking out a new one, make sure you meet your repayments on time.

  9. Read the small print

    If you do decide to borrow money over the festive season, double check all the terms and conditions before you agree to anything. That way, you’ll understand exactly what you’d be expected to repay and when, so you can avoid any nasty surprises. The same goes for any other big purchases you make this Christmas.

  10. Start saving for next year

    Didn’t manage to start your Christmas saving as early as you would have liked? Start thinking ahead to next year now and plan what you can put away each month. The earlier you start, the more time you can spend enjoying the countdown to Christmas, rather than worrying about how you’ll afford it.

    If you're concerned about debt or meeting repayments, the important thing is not to hide or ignore it. The earlier you address a potential problem, the sooner you can take action to solve it, reducing stress and potentially saving money in the long run. Visit our help and support section for more information.

*Source – The Independent