Savings: How to save money over Christmas – five crucial steps to follow | Personal Finance | Finance

“As Christmas approaches and expenses increase, learning how to manage financial stress can be a useful tool,” explained Shaq Magee, co-founder of Millennial Money UK, a community-led platform demystifying personal finance topics. So far, the brand has amassed 24K followers on its Instagram page and is continuing to grow its Youtube offering (Youtube.com/MillenialmoneyUK). Money stresses can strike at any time of year, but between bills, parties and presents, spending can begin to peak during the festive season.

“Financial stress is one of the most common causes of poor mental health in the UK, according to the Money and Mental Health Policy Institute,” said Shaq. “Celebrating Christmas within your means is an effective way to reduce financial stress at this time of the year.”

However, being savvy about your spending doesn’t mean missing out on the things that are important to you. Shaq told Express.co.uk: “The idea that you need to cut out all your personal luxuries to achieve your financial goals is outdated.”

Instead, going into the festive period with a financial plan in mind can help to ensure you don’t overspend. “Think long-term,” said Shaq. “We all loosen our purse strings around Christmas, however, it’s important to keep the festive season in perspective and not lose sight of your long-term financial goals.”

READ MORE: HSBC issues warning on 12 scams to look out for at Christmas

Christmas shopping is arguably the biggest strain on wallets during December, but switching up your buying habits could go a long way to benefitting your budget. Research from F&C Investment Trust found that one in 10 Britons plan to shop second-hand for Christmas presents this year in a bid to save money and be more sustainable.

“You may be able to save money, as well as make your Christmas more sustainable, by choosing to shop second-hand for gifts,” explained Shaq. “In case you needed another reason to hit the charity shops, second-hand finds can make for some of the most thoughtful Christmas presents. Who doesn’t love a unique vintage clothing bargain?”

And while it can be easy to go crazy and pile the presents high, Shaq says it’s important to focus on “quality over quantity”. He said: “Over a third of UK adults plan to give fewer presents this year, while a quarter will be asking for fewer gifts.

“One in 10 even report planning to skip Secret Santa with friends and colleagues. Where possible, reducing the number of presents you give and receive can alleviate some of the financial stress that comes with Christmas, with the added benefit of reducing your environmental impact.”

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How to make a spending and saving plan for Christmas

TikTok creator and financial planner Cortney, who shares content on her page @moneywithcortney, has created a five-step plan to help manage your budget this season. In a video, she said: “If you haven’t created your holiday spending plan and you don’t want to enter 2023 stressed out and in debt because you overspent you need to do it immediately.”

Step one: Choose a maximum budget

Cortney’s first tip is to decide exactly how much you can afford to spend. This includes presents, any new festive attire you want to buy, as well as any parties or dinners you may be attending.

Step two: Separate your Christmas spending money from other expenses

Next, Cortney recommends splitting your Christmas spending money from any other bills or expenses you may have outgoing in December and January.

“Separate the money that you’re going to be using to spend during the holidays from any other money that you have for bills, other expenses, other savings, all of that,” she said. “It could mean opening up separate savings, transferring what you already have over and then scheduling automatic transfers for anything additional that you want to save moving forward.”

Step three: Make a Christmas present plan

Plan exactly who you want to buy gifts for and consider what would be the most appropriate item for each person.

Step four: Price things out

Following on from your present plan, it’s a good idea to do some research before you start spending. “This step is really important in order to make your spending plan realistic,” explained Cortney. “Price things out in advance. Have an idea of what specific gifts you may want to buy the people on your list as well as get more specific about the other expenses.”

Step five: Track your expenses are you go

Throughout the season, continue checking in with each step of your plan to make sure you are not going off-budget. Courtney said: “It allows you to be aware and gives you the flexibility to make adjustments along the line so you can still stick to your maximum budget.”

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