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Christmas is all about festivity, fairy lights, and presents around a cozy fireplace. But for many people struggling with financial problems, the holiday season is often marred with distress and anxiety.

That is because the pressure to consume and overspend is very real at this time of the year- especially in the UK where the average household spends over £800  every Christmas with a sizeable percentage  (up to 23%) admitting that they feel pressured to spend a lot more than they can truly afford owing to social reasons.

The neon glow of billboards and advertisements often aggravate the situation and further serve to strengthen the age-old bond between holidays and consumerism. Unsurprisingly, overspending during the holiday season can have catastrophic consequences for people with debt issues.

But fortunately, there is a way out of this problem. It is possible to spend a very merry Christmas with your loved ones without the festivities taking a toll on your wallet. All you need to be savvy with your Christmas shopping is a bit of planning and creativity.

Here are five smart ways to spend a budget-friendly yet wholesome Christmas:

  • Budget for Christmas Gifts

Rule number one of effectively managing your funds is to budget. Although you should budget all-round the year and try to establish a rainy-day fund  for emergencies, budgeting during the holiday season is especially important because the tendency to overspend runs strong on festive occasions. Budgeting during the holiday season would not just help you reign in your expenses and avoid impulse shopping but also help you manage your money in an orderly manner.

Making a Christmas shopping budget is easy. All you need to do is work out your discretionary income. Discretionary income is the money that remains after your taxes and basic living expense (utility bills, rent, food) have been deducted from your income. After you know how much money you have leftover, you can realistically figure out what percentage of it you can spend during Christmas time.

After you have figured out the sum you can afford to spend on Christmas eve, budgeting will become very easy for you. All you need to do now is divide your Christmas fund into categories. List down all the expenses you are likely to come by during the holiday season. Make allowances for presents, food, outings, and decorations.

Remember, the whole point of making a budget is to identify a spending limit and then stick to it. A budget is just a plan, you also need to implement it in order to benefit from it. So, once you’re done making a budget, cultivate the habit of keeping it on you when you go shopping and checking your expenses against it to ensure that you’re on track.

  • Make a List

Christmas season is also the gifting season. We want to let our loved ones know that they are special, and we took out the time, money, and energy to get them a tangible token of appreciation for all they’ve done for us throughout the year. But if you have a huge social circle or even a moderate one, you should definitely rely on the power of checklists to keep you going.

It is fairly easy to get carried away and lose track of how much you have spent on Christmas shopping sprees – especially if you are ordering stuff online. In addition to keeping your Christmas budget on you, what you can do to counter this is sit aside for a couple of minutes with a piece of paper and list down all your purchases against all the people you are gifting them to.

Make sure you add all the presents you have purchased to your list and make a column for how much they cost you and who you are giving them to. Countercheck your list. This will keep you from mistakenly buying someone’s presents twice and also help you stick to your holiday shopping budget.

  • Cashback Options

Most of us will be buying presents online this Christmas because we are still in the grips of the pandemic. Fortunately, this opens up a whole lot of avenues for you and you can shop smart in the truest sense of the word. There are plenty of free cashback websites that give you the option to purchase from any store of your choice and receive cash back from each purchase you make.

Shopping from websites like Topcashback  and Quidco can help you save some money on each of your purchase. Most of these websites also offer premium memberships for a nominal fee of £5. Premium memberships come with better cashback offers as well as special discounts that you can benefit from, especially if you are buying presents in bulk.

  • Shop Smart

There are a few simple tips and tricks to shopping smart. Firstly, shop in small batches throughout December instead of shopping all at once. This has many advantages. You will get more time to plan your purchases and there may be some early bird discounts you can avail.

Christmas shopping at the ninth hour is not only a hassle but the prices also tend to go up around the holiday eve which means you may end up spending more money. Moreover, shopping for presents last minute can also lead to panic buying and overspending. Not to mention, you will most definitely miss out on the best deals out there. That’s why it’s always better to abide by your budget and shop in small batches.

Another useful tip is to shop around before you make a purchase. This is especially relevant if you’re shopping online. It’s always better to compare quotes and look in multiple stores before settling for a deal. If checking out stores individually is too painstaking a task for you, you can always rely on a price comparison website like, Kelkoo, and even Google. If you use these websites, you won’t have to visit each store individually to find the best price for your presents.

  • 0% Credit Cards

It is highly recommended that you do not use your credit card for Christmas shopping – especially if you are already struggling with debt. But if completely avoiding credit cards is not an option, you should always opt for a 0% credit card.

When you shop on a 0% credit card, you will not have to pay any interest on the items you buy or the services you avail for a set duration of time (mostly 20 – 30 months). However, you will have to clear your balance before this set period elapses, or else you will be slapped with even higher interest rates.

Get Debt Help

If you or your loved ones are struggling to repay their debts or regain control of their finances, Money Advisor is here to help. Get in touch with our friendly and impartial specialists for resources and debt help.

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