Is Christmas Unaffordable for the Average Household?
Written by Tom James on 28 November 2019
Recent research from PayPlan has found that over half of parents will rely on their credit cards to cover their essential living costs this Christmas.
Christmas is a time for spending with loved ones, but this usually results in overspending and denting the bank balance. There’s a lot of pressure to purchase presents, particularly with the Black Friday and Cyber Monday events encouraging buyers to make purchases they may not have made previously.
How much do we spend on Christmas in the UK?
According to the Bank of England, a typical UK household spends £800 more in December compared to other months. Given that the typical spend is said to be £2,500 per month, this rising cost is sure to damage the finances of many households.
The UK reportedly spends around £446,000 on presents every minute in December, so it’s not a surprise that these costs need to be spread out. However, this is how people fall behind on their repayments and get into financial difficulty.
How has spending changed?
Black Friday and Cyber Monday no longer last just a day, which is causing people to spend more across November and December. There appears to be more pressure to grab a bargain, rather than make a budget early on and stick to it.
A PayPlan survey found that people felt negatively about their financial situation, with half of parents (50%) saying it had caused them high levels of stress. 23% even admitted to borrowing money from friends and family members just to make it through the season.
Household bills will rise over the winter season due to colder temperatures. Coupled with buying presents, this means people are often not as prepared as they think for the increase in outgoings. It’s clear that the essential bills, which are usually the focus throughout the rest of the year, are being neglected in order to buy presents.
How to spend it well at Christmas
We wouldn’t want to tell you about the dangers of overspending at Christmas without a few top tips to take away! Take a look at these little hints and see how you can save and spend Christmas on a budget.
- Use Voucher Codes – A quick browse online for voucher codes can see you reap instant rewards for very little effort. Shops are especially good with giving discount codes out around the late September – Mid-October mark to encourage early purchases, so use it to your advantage.
- Shop Around – Lots of discount shops now offer the cheaper version of the more well-known board games and toys. Charity shops can also be great for the time-rich buyer who is looking to save.
- Get Creative – Make your own chocolate selection boxes, Christmas decorations and even your own hampers using a wooden basket, some clear wrap and a nice ribbon so you can fill it with your child or partner’s favourite things without overspending.
- Keep Track of Your Spending – Lists, lists, lists! Keep every purchase tracked and keep checking it. (There’s a reason Santa checks his list twice). Doing this and managing your purchases over a few payslips will definitely keep you on track.
Advice from an expert
One of our specialist money advisers, Jane, has these words to say about how you can stay alert when it comes to Christmas spending:
“You should set yourself a budget as early as possible in the lead up to Christmas, to make sure you are fully prepared. If you find money is tight over the holidays, you may want to get thrifty over the festive season and be on the lookout for offers, as well as charity-shop bargains.
“Newer festive holiday dates such as Black Friday and Cyber Monday have seen a push toward retailers dropping prices which can be a help, but it can also lead to customers buying more expensive items to cash in on a ‘deal’ for something they were never intending on purchasing. You will want to be careful to not make an unnecessary purchase.”
Seek help straight away
If you’re struggling to keep up with the cost of Christmas, seek help sooner rather than later. The quicker you act, the quicker you can get your finances back on track.
Speak to a PayPlan adviser for free today. Call 0800 280 2816 and see how we can help you.
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