Five ways to stay on top of spending this festive season

Please see our glossary for information on the financial terms used in this article.

The festive season is fast approaching, and as delightful as it can be to celebrate with friends and family, increased spending puts pressure on budgets that may already be stretched by living costs.

According to the Bank of England, the typical UK household spends over £700 more in December, which is roughly 30% more than is spent during other months. So if you’re budgeting for the holidays, you’re not alone.

Here are some tips to help you stay on track during the festive season.

Take time to shop wisely whether in person or online

Shopping around and comparing prices can save you money. Be a smart shopper and check prices at as many different retailers as you can. It’s not just the actual cost of the item you’re buying that counts – reduced or free delivery charges and a flexible return policy are also important.

Choose authorised retailers to buy safely

It’s not uncommon for unauthorised traders to pose as legitimate ones. You don’t want to find out you paid top price for an item that’s been sold under false pretences. It’s safest to purchase from known outlets for brand name goods and deal only with genuine traders with favourable delivery and returns policies.

Why not consider a two-way gift?

It would be great to give a gift that could last for many years to come. Whether you’re a parent, grandparent, auntie or uncle, one example of an ongoing present that you can give is a Junior Individual Savings Account (JISA), which can help support your children, grandchildren or nieces and nephews plan for their financial future.

Please remember that anyone can gift or contribute into a JISA as a third party contributor. However, the account has to be opened by a person with parental responsibility or legal guardianship – this person will be the ‘Registered Contact’ and have responsibility for the investment. However, remember that the savings in a Junior ISA as a stock market based investment should be considered as a long-term investment as they are locked in until the child turns 18.

JISA tax advantages depend on your individual circumstances and JISA tax rules may change in the future.

Welcome financial support can come in many forms and at different stages of life. It could be a one-off financial boost, a regular gift or a lasting leg-up. It could even take a more philanthropic form, using your assets to help support the causes closest to your heart. The reality is that these are powerful, personal and positive choices, to be considered at any stage of our lives, and ones our loved ones would be grateful for. 

Factor in shipping and postage when sending gifts

If you’re posting gifts, check prices and postal dates for UK and international services. The most economical postal dates may be earlier than you think. Early shipping can help you avoid the considerable extra fees that you’ll have to pay for last-minute express service. And early shipping also helps prevent disappointment. A Christmas gift in January, while still welcome, is not what most people would prefer.

Make sure you think of everything before using ‘buy now, pay later’ offers

Many shops and websites offer a ‘buy now, pay later’ service that can sound very appealing, especially at a time like Christmas, when costs are usually mounting up. However, it is important to take into account the fact that you will have to pay at some stage. You’ll need to be sure that you will have the money available when the payment is due; late or missed payments can carry substantial charges and may affect your credit rating.

Using these strategies and staying conscious of your spending can help you avoid a financial ‘hangover’ in January. And there may be other areas of your budget that could benefit from a closer look. You may find it helpful to explore this free budgeting planner offered by the Citizens Advice Bureau: Work out your budget – Citizens Advice Bureau.

 

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. The views expressed here should not be taken as a recommendation, advice or forecast. We're unable to give financial advice. If you’re unsure about the suitability of an investment, please speak to a financial adviser.