Lighten the financial load this Christmas - Martin Lewis
While everything else has changed this year, one thing is still rock solid and steadfast – December 25 will still be Christmas day. Yet of course for some it’s likely to be a very different Christmas. Perhaps though, the bronze lining to the hideous spectre of Covid throughout the festive season, is that it may just take off some of the cost and pressure that many feel in the run-up to the big day.
And while I get frustrated just as much as the next Scrooge about the ever earlier encroachment of Christmas, I still think everyone should start thinking about Christmas as soon as possible (arguably doing it now is already on the late side).Many people spend as much on festivities as on a summer holiday. It’s one of the year’s big annual expenditures so everything you can do to lighten the load is positive. Let me run through some key thoughts about keeping Christmas finances under control when things are stretched.1. Let the finances rule, not the festivities. Don’t sit there and design a lust list of how to have the best possible Christmas – for most people that just leads to debt or disappointment (more so likely this year). Instead first work out how much you’ve got to spend and ask what’s the best Christmas you can have within that budget.If you’re really struggling, and have nothing, then go cold turkey. Have fun, see family (within the government guidelines), watch the telly, but try not to spend money. Christmas is just one day. Far more important is a happy, financially stress-free New Year.2. Make a no-unnecessary present pact. Yes, it’s the season of goodwill but that doesn’t mean you need to turn Christmas into a retail festival, by buying unnecessary, often unwanted and unneeded gifts for friends and family because they bought you a gift. That just adds to costs, stress and isn’t good for the environment. It’s especially true this year when you’ll see less people to work out when you’re buying and when you’re not.And don’t see this as a negative, millions have viewed and liked my videos on this, with comments like this from Julia, who tweeted me: "@MartinSLewis, finally took your advice and told family I can't afford Xmas presents. What a weight off my mind. Thank you." See my full www.mse.me/banChristmaspresents blog for more on the theory.Or if you really feel the need to give, make a donation to charity instead of presents for the same cost. Charities across the UK are really struggling this year, so it’s never been more important. And that way you know it’ll really be needed.
3. Earn free £125 in time for Christmas. A few bank accounts pay you to switch to them, even better do it soon and you could get the money in time for Christmas. Newbies to www.hsbc.co.uk can get a free £125 switching to its Advance account – to qualify, you need to open the account and start a switch, including two-plus direct debits/standing orders, within 30 days, and pay in a minimum £1,750 per month (equivalent to a minimum £25,600 per year salary going in). The cash comes 30 days after the switch completes – so in time to help with the Christmas costs. For full eligibility see www.mse.me/topbankaccounts.
4. Give time not money. Presents don't have to equate to big bucks. Quite often loved ones prefer homemade personal gifts, like homemade jams or sweets, or even just giving your time (which is completely free). You can go to www.mse.me/ChristmasGiftCheques where you can print out a promise to someone like giving a “massage” (nudge, nudge) for your loved one, babysitting or letting the kids have a sleepover (when allowed). So, pledge to do something nice, not spend.
5. Little uns aren’t retails snobs. You may feel obliged to buy expensive gifts for your children, and even feel guilty you haven’t spent enough. But remember young children don’t value your gift based on price – they are often more interested in playing with the wrapping than the actual gift inside.
6. Set up a Christmas cupboard. Work out now what you want to buy, then if you spot a bargain, you can pounce on it when there’s a code, voucher or discount that’s cheaper (ensure you get the weekly email at www.moneysavingexpert.com to tell you). Even better, once you buy a present, bag it, wrap it, and pop it in a Christmas cupboard – gradually getting the chores done.
7. Earn 5 per cent cashback on your Christmas shopping. If you’re going to be spending for Christmas you might as well do it on a card that pays you. The no annual-fee www.americanexpress.com Everyday credit card pays five per cent cashback on your first three months' spending (max £100), then up to one per cent after. Get it now and this coincides with the high Christmas-period spend (cashback won’t be paid till a year later, and after you spend £3,000-plus). Ensure you set up a direct debit to repay IN FULL each month to avoid the 22.9 per cent rep APR.
8. Grab end of sale bargains for next Christmas. Stores like John Lewis and M&S start to discount their giftwrap, Christmas cards, decorations and trees a week or so before Christmas. So, if you need things for next Christmas, you may as well buy them when it’s discounted rather than full price next year. Plus, Christmas veggies tend to go on sale the week of Christmas, so wait till then and you can get veggies from as little as 20p.
9. Raise cash to spend, rather than cash you’ve got. Some make their children sell their old toys to buy new ones. It’s not a bad attitude. There are ways to try and raise cash. Walk round the house, and see what you’ve not used in a year, then ask yourself if you should flog it.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip
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