Last year it was expected that households would spend, on average £796 on Christmas – with £596 going on gifts, £159 on food and drink and £41 on cards, trees and decorations.
Read more: Black Friday – what’s all that about?
Depending on the size of your family and friends, and on how generous you are, it’s quite possible that you spend more than this every Christmas. And this doesn’t even take into account the cost of going out, and the endless round of parties.
As a result, it’s also possible that you are relying on credit to make the festive season bright. And that means, you may still be paying Christmas off well after the last bauble has been put back in the attic.
According to figures published by the Bank of England, families borrowed £1.5billion on loans and credit cards in November 2015. It’s the kind of Christmas hangover that no one really wants.
7 ways to cut the costs of Christmas
Christmas is going to come around every year, and it’s likely to be expensive. So we’ve put together these helpful tips that will hopefully keep the costs down. We know you might not be able to stick to all of them, but following as many as you can could mean you won’t be paying for Christmas the following June.
- Set a budget and don’t go over it. It’s easier said than done, but allocating a budget to presents, food and drink and other expenses means you can plan ahead and keep costs under control.
- To ensure this happens – make lists for gifts and for shopping, and stick to them like glue. Don’t get tempted by impulse purchases.
- If you are planning ahead, you could try to put money away every month into a separate Christmas fund. It’s the way ‘Christmas Clubs’ used to work in the past.
- Continuing the planning theme – don’t leave it to the last minute. Give yourself enough time and you will be able to shop around and find the cheapest retailer (online or off) for specific gifts.
- Cut back on discretionary spending in the run up to Christmas – give your early morning cappuccino a miss and put the money in a jar, it will soon add up.
- If you know you are going to be using credit cards, you could think about using a card that gives cashback, so you can recoup some of your spending
- Similarly, if you are using a credit card that is charging interest, you could try to transfer the balance to a 0% card after Christmas and reduce repayment costs.
Before using cashback cards or transferring balances, it’s worth making sure you factor in interest rates and transfer fees, as they could mean you end up paying more than you would when using a different card.
Remember that missed or late payments stay on your Experian Credit Report for at least six years, and this could have a big impact on your future ability to get credit – so try to stay within your credit limits and try to pay your credit bills on time.
In order to give yourself a chance of getting the best deals on a credit card, you should make sure that your Experian Credit Report is up to date and that your Experian Credit Score is the highest it can be.