Budget for a very merry Christmas

A bit of planning and forethought may help take the financial stress out of Christmas.

Christmas is a happy time of year that brings people together but it can also be expensive. With a bit of early planning you may control your festive season spending.

Here are some tips to help avoid a New Year financial blowout.

Draw up a budget

You know it makes sense, but it can seem a bit Scrooge-like. Start with the total amount you want to spend. Divide this into gifts, catering, entertainment and travel and list the items you need to purchase in each. Then put a spending cap on each category.

Sort your gift-giving

Draw up a gift list and allocate how much you want to spend on each person. If money is tight, consider options such as vouchers for home-cooked meals or gardening as alternatives.

It may help for big groups of relatives or friends to agree in advance upon a spending cap per gift. Another option is to do a Secret Santa by choosing each other’s names randomly from a hat. Each person then buys the person they picked a gift, instead of buying for everyone.

Open a Christmas account

Set up a special bank account early in the year and use a regular auto payment option. The sooner you start saving, the more you will have.

Make a shopping list

Wandering through the shops without knowing what to buy may cause you to overspend. Do your research first, then set out with your shopping list in hand and stick to it.

Be prepared to bargain as smartphones make it easy to compare prices. Avoid last-minute shopping as this may result in rushed and expensive decisions. Even better, pick up bargains in the sales earlier in the year and put them aside.

Above all, keep your head and stick to what you can afford.

Travel smarter

The holiday season is one of the most expensive times to travel, so it may be worth considering house swapping, camping or having a staycation. If you are travelling, a budget will help you stay on track.