Top tips for managing your finances this Christmas

Christmas is fast approaching and although it can be the most wonderful time of the year, it can also be a period that can put added pressure and strain on our wellbeing. This can be caused by our finances being stretched through the cost of purchasing presents, food and celebrations.

Budgeting

One of the key considerations when it comes to navigating through the festive period is the use of a budget. Each individual has different spending capabilities so it is important to establish early on what your Christmas budget will be and then stick to it. Although sometimes this can be easier said than done, it could be useful to transfer your established budget into a different account, or set up a pot on your banking app. Remember to prioritise and ensure that regular bills and living expenses are all accounted for.

Borrowing

Overspending during the festive period is easy, so it is important to find a method that works for you and will allow you to establish and adhere to a feasible budget. It can be easy to consider credit cards and borrowing, but this should be avoided. The stress and cost of repayments/interest will outweigh the potential joy of the initial purchase. If you do have to borrow, ensure this is at 0% and that you have a plan to repay this debt. 

Allocating

Once you have set your budget you could also consider putting your funds into ‘pots’, so pot one for presents and pot two for Christmas food, having the funds set out in this way and keeping it separate from your day to day spending can help ensure that you are not spending more than you plan to.

Timing

Another useful tip is to start early if possible; this can make the spending much more manageable and have a smaller impact on your day to day finances.

Shopping

‘Shop smart’ and by this I mean look for deals. Shops are likely to be providing big discounts this year to entice people back to the high street as the festive period could be a make or break time for them. However, shopping on the high street may cause you to buy more than you had planned, so be aware of your priorities and your budget. If you are travelling book your tickets early where possible to ensure you get some of the best available prices. Although this could be difficult in view of the changing travel restrictions as a result of the pandemic, so be sure to check the latest government guidance in your area. Finally, make sure you request gift receipts too, so if returns are required you don’t lose out.

Money worries can have an impact on your mental health. If you can stick to the traditional financial principles of budgeting, spending what you can and not what you want, as well as looking for good value, this should lead to positive mental health and a happier New Year. 

The information given and opinions expressed are subject to change and should not be interpreted as investment advice. All data is sourced by IM Asset Management Limited unless otherwise stated. All financial and wealth management services are provided by IM Asset Management Limited which is regulated by the Financial Conduct Authority (FCA), FCA Firm Reference Number 402770.

Money worries can have an impact on your mental health. If you can stick to the traditional financial principles of budgeting, spending what you can and not what you want, as well as looking for good value, this should lead to positive mental health and a happier New Year. ”