Christmas doesn’t have to break the bank so start planning now

We all have that one person in our lives who brags about how prepared they are for Christmas before the Halloween decorations come down. They can barely disguise their glee when you tell them you haven’t even made a present list yet.

“Really? I wrapped mine last week and had the family’s matching pyjamas dry cleaned for our Instagram photo under the tree I pre-ordered back in June,” they say smugly.

“Aren’t you stressed, after all there’s only nine weekends left until Christmas?”

At this point, you would be well within your rights to block their number so you never have to speak to them again. Christmas is stressful enough without others trying to stretch it out so that we can start feeling anxious in October instead of just the requisite December.

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But when it comes to managing money in a way that means you might even have a bit left over after Christmas, planning ahead for the festive period is key.

For starters, it could help spread out costs rather than getting to December, panicking, putting it all on the credit card and waking up in the new year with a debt hangover.

This year has been a tough one financially for many households with rising mortgage repayments, higher rents, energy bill hikes and the day-to-day slog of paying more for our essentials that comes with a cost-of-living crisis.

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Last year, consumers in Ireland planned to spend an average of €1,200 each on Christmas shopping, according to research from the Competition and Consumer Protection Commission. That represented a 20 per cent increase from 2021, with 73 per cent saying the increased spending was due to higher prices.

With inflation it’s likely we could see the trend continue in 2023. While the majority of shoppers said savings would cover their Christmas food and gift shopping, 24 per cent said they relied on some form of borrowing.

Coming up with €1,000-plus at once in December is a lot of pressure but if we borrow some of that smug “there’s nine weekends to go until Christmas” energy, suddenly we have more breathing space to reach that goal. So despite it being October, here are some surprisingly simple ways experts take the money stress out of Christmas,

Spread out the cost over time

Costs are easier to manage and meet when spread out over numerous pay cycles, putting a little away each time instead of suddenly having to come up with a lump sum at the end.

For Caz Mooney, author and budgeting expert, the best time to start putting away a little bit here and there for Christmas is the January after the last one. But she stresses it’s never too late to start chipping away at Christmas costs.

“Even though we are quite close, if you can save a bit from each paycheck that will really help,” she says. “If a parent gets extra child benefit that will help, don’t be afraid to use that money that time of year if it means you’re not looking at debt.”

Anne-Marie Gaynor, the budgeting influencer behind Instagram’s Irish Budgeting Mammy, also prefers to financially plan for Christmas in January but recognises that might not be realistic for some.

“This year has been a tight year for everybody so people might not have extra money to put into a sinking fund for Christmas,” she says. But as Gaynor says, “it’s not even Halloween” which means people do have the opportunity to start “putting money aside every pay [day]”.

The food shop, while a crucial part of Christmas, is something “people forget to add” when calculating how much cash they’ll need overall.

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Aside from the dinner itself, “you do have those little extra expenses like crisps and sweets”.

This is where some pre-planning and some self-restraint comes in handy to dilute the costs across a few shops and pay cycles.

“I recommend stocking up on one or two items in the run-up, especially non-perishables or anything that can freeze,” says Mooney.

“Start thinking a little bit more about what you need and see if there’s offers starting to come up in shops but make sure it is worthwhile and you will use it.”

Don’t spend out of obligation or unchecked emotion

Christmas is an emotional time of year. We spend time with loved ones. We’re reminded of the people we lost in the year. Family tensions heighten. We want to give kids happy memories. We feel strangely compelled to catch up with everyone before the year ends or we won’t be friends any more. The John Lewis ad makes us cry.

It’s easy to let it get on top of us and dictate our spending. Added with a sense of social obligation we find ourselves buying expensive things we’re not sure people will even like because we want them to know we care. Or worse buying things for people because we know they’re buying for us and we don’t want to be talked about.

This is where taking a moment to think about what the person actually needs or wants might actually see you reduce costs, according to Mooney who suggests giving the “gift of presence” over presents.

“This is great with friends that have kids but offer to babysit so they can be able to say ‘can I cash in that and go to the hairdressers’,” Mooney says. “It just means you’re able to hand over kids guilt-free and enjoy that time.”

Communicating with friends and loved ones about presents ahead of time eases the anxiety around expectations. For example, Mooney encourages telling a friend “instead of exchanging gifts, let’s have an evening in and catch up because I haven’t spent as much time with you as I’ve liked lately”.

Have a present spend limit and make it public

Gaynor recommends writing down all the people you have to buy for and then “decode who’s on your naughty and nice list” because “you don’t have to buy for everybody”.

“We think we have to buy for other people but the way things are at the moment, if you say to friends I’m not buying presents this year in advance, they might actually be very relieved.”

If you have a common group of people such as siblings, Gaynor suggests implementing a spending limit on gifts – for example €20 and under for each person to keep things in budget and fair. When it comes to parents or others likely to gift expensive presents, warn them early that you plan to budget this Christmas and don’t want them to spend a disproportionate amount on you.

[ Christmas ‘treats’ in budget will not improve lives of poorest households, say advocacy groups ]

“That way you don’t feel awful if someone gives you a present of €150 and you spent €20 on them,” she says.

Instituting a family secret Santa is another way to keep up the Christmas spirit while staying within budget.

“You can spend a bit more on someone than you would normally so instead of spending a tenner for each person you might decide on giving one €50 present,” explains Mooney.

Making hampers from local produce can serve the dual purpose of keeping costs down and supporting local businesses, she advises.

If you still squirm at the thought of someone buying you a gift when you didn’t get one for them, she says having a press stocked with inexpensive treats as emergency gifts can help.

“If I’m caught unprepared or with unexpected guests I can pull out a box of chocolates, then I can just enjoy that time with them and move aside that feeling of guilt,” she says.

Don’t fall for flashy deals and other retail tricks

As Black Friday and Cyber Monday loom, it can be tempting to snap up items on Christmas wish lists if they’re “on sale for a limited time only”. But it’s important to make sure that you’re actually making a saving.

In some cases, prices have either been increased before the discount or the item has been brought in specifically for the sale and has never been sold at the “before” price so that bargain shoppers think they’re getting isn’t one at all.

“Now is a really good time to look at those prices before they go up to make sure the offer is worthwhile,” Mooney says.

“Black Friday is a bit better for bigger ticket items like electronics but make sure, when you add postage and custom charges, it’s still a deal.”

[ One-off cost of living supports ‘will be in people’s pockets by Christmas’ - Varadkar ]

There are several price-tracking tools available online that will display the pricing history on items on sites like Amazon to get a clearer idea of what the discount actually is.

Gaynor says it’s important to know what our weaknesses are before we’re confronted by them in a busy retail environment designed to make us spend more money.

“Know what kind of shops make you spend more money. If it’s something you need in that shop, try and go online instead of in person,” she says

“We’re popping things in a basket in the shop and we get up to the counter without realising how much it is but shopping online means I get to checkout and I know what I’ve spent and where there is wasted money.”

Lastly, for parents feeling the pressure to make sure Santa brings everything on the list despite a smaller budget, Gaynor has some reassurance.

“I have an adult son and he never remembers what I bought him when he was younger but he talks about the places that I brought him,” she says, stressing that time spent with kids outranks money spent when it comes to Christmas.