Christmas on a Budget
Christmas on a budget might sound daunting but we’ve found that a magical Christmas doesn’t have to break the bank or leave us nursing a financial headache at the end of the year. Before I say anything about budgets, first of all let me assure you that if you were to walk into our house on Christmas Day you would not be able to tell that we’re now running on reduced finances. Christmas now is as special as it ever was, even though it’s done on a budget.
It’s not that we’ve ever been rolling in money so we’re quite used to budgeting at Christmas time, as we do the rest of the year. I suppose it just feels a bit more important to get it right these days.
We have committed to living frugally and this extends to financing Christmas. Our strategy is to cut costs on the things that don’t really matter to us so that we can spend more money on the things that we truly value.
Here’s How I Make Sure Christmas is Affordable
Start Saving Early
If you read my Budgeting Blueprint, you’ll know that my money is organised into pots for several areas of life and of course there has to be one for Christmas. This savings pot is one of my most important, so I have a direct debit set up and every month, a fixed amount obediently shuffles its way from our main account into the Christmas pot.
I can’t tell you the relief this system brought when I introduced it a few years ago. Previously, I have to admit to some years when we had been those people bunging Christmas costs on a credit card and paying it back throughout the year. I don’t recommend this if you can avoid it - who wants to start off a new year in debt?
Planning and sticking to budget
Here’s where the spreadsheets come in. There’s no point in setting a budget but then not sticking to it. So the budget needs to be realistic.
My spreadsheet contains the names of everyone we buy gifts for, a budget for each person and what we’re buying for them. As I make purchases I update the spreadsheet to check that I've stayed within the budget.
Here’s just one example of a simple spreadsheet for those of you who want to give this method a try: Free Christmas Shopping Planner Download
Santa’s Budget
Within the Christmas budget there’s a Santa budget. Now, Santa’s budget requirements can vary wildly from year to year so I try to allow a bit extra! There have been years where our sweet children have asked simply for books or “a cuddly Tasmanian devil” and Santa’s wallet has breathed a sigh of relief.
(There were years when letters to Santa contained wishes that money couldn’t even buy - the most memorable one being singing Proclaimers dolls!)
Inevitably, as they grow, the price tags on the desired gifts also tend to grow. Like most parents, we want to be able to ensure that our kids are treated to some of the things they covet so this is always the priority in terms of gifts. Once the figure for Santa's budget has been calculated, I can work out the budget for everything else.
It’s not all about the presents
Presents are a big part of Christmas in our culture, but they don’t have to blow your budget. We’ve learned to set a realistic limit and to try to get creative within that budget to give meaningful gifts. With some of our friends and family we have an agreement to exchange only small tokens or only buy for the kids. Some years James and I have set ourselves the challenge of coming up with a meaningful gift on a £10 budget for each other which has involved some time consuming creativity (usually on Christmas Eve). Who says romance is dead?!
Food, glorious food!
I used to bury my head in the sand then feel a bit sick at the till over how much the cost of this one dinner totted up to. Cue beans on toast for the rest of the month! Thanks to my budgeting throughout the year, it’s no longer a problem.
In addition to my Christmas savings pot, this year I’ve also managed to save up a decent amount on a store loyalty scheme. That feels like free money, making our indulgences feel like an extra treat!
If I pick up bits for Christmas during a normal food shop in the run up to Christmas, I make sure to transfer the money from the Christmas budget so that our Food account stays on track.
Team Effort
When it comes to the Christmas food shop, I don’t carry the weight of it all. We will be sharing the festivities, the catering and the costs with family. Between us the menus for the Christmas period are planned in advance so we all know who is buying and cooking what. Buying in bulk allows us to cater for the Christmas period, using up leftovers and making sure nothing goes to waste. This also spares us the trauma of trolley wars in the supermarket on Boxing Day!
Trees and decorations
Over the years, we have accumulated a collection of decorations and year after year they are lovingly placed around the house like the special guests that they are. I’m not saying I’ll never add to the collection but I don’t see the need to buy new things every year.
Christmas wouldn’t be Christmas without a real tree for some people so it’s right for them to spend money on one each year. For us, we’re happy with our artificial tree - a bargain the year we got married. It's still serving us well so we’re able to put what could have been “tree money” towards other Christmas costs.
No PJ bandwagons
I have no idea how we managed to convince James but there was one year where we donned our family Christmas PJs. Now, they seem to be marketed as a Christmas must-have but, even if I did have a husband who would partake, when I see the cost of these PJs all I think of is how many actual presents I could buy for that money. Some would say we’re spoilsports - we like to say frugal!
Actually use the accumulated stash of cards and wrapping paper
I used to mindlessly buy rolls of wrapping paper and packs of cards every year despite the fact that there were always leftovers from the previous year. So now, I make myself get organised and do a wee stock check before I go near any shops by checking my stash so that I know how much I actually need to buy.
Togetherness
Maybe it’s because Covid forced us to experience a restricted Christmas in terms of family, or maybe I’m getting old and sentimental but I know I’m not alone in feeling that the true magic of Christmas comes from being with our loved ones (even in non- matching pyjamas). And that doesn’t need to cost the earth. We can cherish our Christmases together, having fun and making memories without feeling stressed or letting our spending spiral out of control.
There are so many ways to create a magical Christmas while sticking to a budget, I'd love to see some tips in the comments below!
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