8 ways to enjoy the festive season without falling into a financial rut

Published: 13 November 2021. Written in by Lauren Clark.

From being honest about your budget to getting creative with gifts, we asked a financial expert how to make your money stretch that much further over the holidays. It’s the most wonderful time of the year – but the costs of the festive season can add up with reports stating that Christmas dinners are said to increase by 3.4% due to inflation.  Frozen turkeys have increased by 7% and Brussels sprouts have jumped 5% (although, interestingly, carrots and parsnips have dropped by 13% and 6% respectively, so stock up on those!). In addition to this,  there’s advent calendars, nativity costumes, decorations and presents for the big day itself and your bank balance can be left feeling the strain. Some of us might also be feeling additional pressure to make this Christmas perfect, with many families being reunited for the first time in two years. With that in mind, we spoke to Kim Jarvis, a Technical Consultant in Tax and Trusts at Vitality, about how to manage the cost of Christmas and prepare for the next festive season. Here are some top tips for a cost-efficient Christmas:

1. Start by creating a budget

Being cautious about your outgoings is important both financially and for your mental wellbeing. ‘One of the biggest stresses people report is money worries,’ says Jarvis. In fact, according to the charity Mind, financial concerns left unchecked can lead to anxiety, panic and sleep problems. Creating a budget is just one way to help elevate these concerns and understand how much you may need to put away. Start off with asking yourself: ‘What are my essential bills over that period’ and ‘How much extra will I need for Christmas?’ Although research has found that 29 million UK adults don’t feel comfortable talking about money,  being open with others about what you can afford should also ease the pressure and help you stick to a budget. ‘Try to be honest with your family if you’re feeling the financial strain,’ insists Jarvis. ‘If you’re hosting Christmas dinner, you could ask guests to contribute either a course, the wine or some money to ease the financial load.’  

2. Shop early and plan ahead

While it’s a little late for this Christmas, when January comes it is wise to be on the lookout for discounted, timeless festive items, such as decorations or even Christmas puddings, that will last until next December. ‘Often there are cards on sale and you might even see things that will make good presents, which are reduced in price,'' recommends Jarvis, when considering how to spot Christmas gifts on a budget early. ‘While January is a month when you might not have as much money floating about, if you are able to make some savings here it will help with next Christmas.’

3. Consider your options

It’s not just important to get a good price on your wishlist items – it’s also about how you purchase them. Jarvis advises borrowing responsibly if you need to and warns against using credit cards with high interest rates or extra fees. ‘While using credit cards and buy-now-pay-later schemes, remember that the amount you have borrowed needs to be paid at certain times. Whilst both can be useful for spreading out the cost, be cautious about missing payments.’

4. Keep saving

If you can, saving throughout the year can help bring down the cost of the festive period. ‘One option could be to put something aside each month,’ she advises. That way you’ll know how much you have stashed away, helping you to create a budget ahead of time. Keeping a lump sum, tucked away, can also be good for sticking to a budget when you eventually go to spend it. ‘Having this and a shopping list means you’re less likely to buy on impulse, which could mean you end up spending more’ she adds.

5. Get creative

A good way to rein things in might be to do a family Secret Santa; try a website such as drawnames.co.uk. You can send email or WhatsApp notifications to those involved so they can draw names at random. Alternatively, set an agreed price limit that’s affordable for everyone. This not only stops people overspending, but is also more sustainable since people aren’t receiving lots of unwanted gifts that are destined for the bin on Boxing Day. It is estimated that £42 million worth of Christmas gifts and the paper they’re wrapped in will end up in landfill. However, it’s also worth your while to think outside the box, notes Jarvis. ‘Maybe it’s worthwhile looking at points you may have on store cards that could make things a bit cheaper or vouchers you haven’t used yet,’ she suggests. You can also check out Vitality’s partner discounts in Member Zone. It’s worth remembering too that it doesn’t have to be a physical item. On the subject of environmentally friendly presents, giving someone the ‘gift of your time’ to help with a task they’ve been putting off can be a really thoughtful, budget-friendly alternative.

6.Regift

Remember those aforementioned unwanted Christmas gifts? We’ve all been there, wondering what you’re going to do with that scarf from your auntie that’s really not your style or that Barbie for your six-year-old who prefers dinosaurs to dolls. ‘It can be a good idea to make a note of who you get something from and then keep it in a “gift” cupboard before giving it as a present another year or to charity,’ recommends Jarvis. As well as being an easy money-saving win, giving something a better home and being more sustainable - it also stops you clogging up your home with things you don’t need. One study found that visual clutter impacted work performance and wellbeing – with more of us WFH, it seems extra wise to pare back.

7. Rethink the essentials

While Christmas may come steeped in tradition – from the star on top of the tree to Slade on repeat – you can always rethink what counts as an ‘essential’ item. ‘Crackers may fall into this category – usually coming with a paper hat and a toy that you’ll probably quickly chuck away,’ says Jarvis. You could save yourself anywhere between £3-30 by choosing to forgo them this year. As a Vitality member, you could get partner benefits and rewards with a range of big brands. Available with qualifying health insurance and life insurance. Log in to Member Zone for the details.