How to spend less this Christmas without losing the cheer

Spirited,

the new Christmas musical comedy starring Ryan Reynolds as a modern-day Ebenezer Scrooge, is the latest screen take on the Charles Dickens classic A Christmas Carol.

The story has become a festive cautionary tale: no one wants to be seen as a miserable miser at Christmas even when they’re preoccupied with how much their fairy lights will cost them in electricity come January.

It’s tempting to nurture our inner Scrooge this Christmas.

Research from credit unions show that rampant inflation – evident in our runaway energy and grocery bills – will knock an average €3,000 off our spending power this year.

Small wonder that six in 10 people say they will have less money to splash out this festive season.

Colette Devey, consumer products and retail lead at EY Ireland, says: “Consumers are likely to be spending less overall on gifts this year.”

But there are ways to make sure Christmas 2022 doesn’t break the bank and create a new year’s financial hangover – without being labelled a Scrooge. Here’s how:

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1 Write a list

Emulate Santa and write down the people you want to give a present to.

Agree spending limits on gifts with family and friends and then set an upper limit for each individual on your list. If your budget doesn’t stretch to your list, look at where you can cut back. Once you’ve made a purchase, make a note of the cost on the notes app on your phone.

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2 Set a budget

Calculate how much Christmas will cost you this year. Set a budget for how much you’ll spend on nights out with friends (bear in mind that restaurant, bar and taxi prices have gone up), on day trips with kids, on cards, stamps and wrapping paper, and on extra groceries.

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3 Avoid debt

Unlike Santa, you don’t have to slip into the red at Christmas. Your family and friends know that the rising cost of living means there is less money to go around and would prefer you didn’t sink into debt to pay for their gifts.

Money coach Kel Galavan, who documented how her family escaped crushing debt to save €27,000 during a “no-spend year” on her @mrssmartmoneyhq Instagram account, says: “I’m spending a lot of time this year giving people permission to not blow the credit card.”

If you have no choice but to get into debt, do so in a planned way by getting a loan from your credit union or bank rather than spontaneously reaching for the credit card or Buy Now Pay Later (BNPL) app in a shop.

If you don’t have the money in the new year to pay off your credit card bill in full, you’ll be paying an annual percentage rate (APR) of between 13.8pc and 26.6pc, depending on your lender.

4 Start a new tradition

If Kris Kindle isn’t a tradition in your family, be the one brave enough to suggest you start it this year. Chances are they’ll be grateful you brought it up – some 54pc of adults want to do Kris Kindle this year because it’s less expensive, according to a PayPal survey.

And by choosing one member of the family to buy a decent present for rather than buying small presents for everyone, the recipient is more likely to get a better quality gift.

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5 Manage expectations about Santa

Explaining financial constraints to children – especially younger kids – is tricky, but there are ways around it.

“If they have their heart set on something, say ‘Santa is a busy guy so give him a list of three or five things you like’ and then get whatever’s in your budget,” Galavan says.

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6 Make your own decorations

Avoid buying up new decorations and make new ones instead.

“You can flesh out your existing decorations with holly and ivy,” Galavan says.

“You can use them to make a lovely wreath or decoration for the mantelpiece.

“Dehydrate oranges in the oven and add them to these decorations. Centrepiece and piece over mantelpiece with wire. If you have kids, go out picking pine cones and spray-paint them.”

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7 Don’t go wild in Santa’s grotto

Some trips to see Santa can range in cost from €80-€170 for two adults and two children, and that’s excluding the cost of photos, fuel for the car and a bite to eat.

“It’s nice for younger children but when they get a bit older, do something else instead that’s free,” Galavan says.

“This year, my mom is bringing us all to a garden centre where there are lights and we’ll order a fancy hot chocolate and eat before we go. Or you can walk through a Christmas market and let them pick something small to buy.

“I also love driving the kids around the local area with a thermos of hot chocolate and getting them to pick the house with the best Christmas lights.”

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8 Choose communal experiences over gifts

Instead of your extended family exchanging gifts, agree to go out for an early bird dinner or host a pot luck dinner at someone’s house, with everyone bringing a dish they’ve made.

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9 Regift

If you’ve received enough scented candles to keep your home smelling good until 2026, or a corporate hamper, don’t be afraid to regift items you won’t use and someone else might like.

Be sure to make a note of who gave you the gift in the first place to avoid any awkward moments!

If you’re buying gifts for extended family and you won’t see them until the days after St Stephen’s Day, don’t be afraid to shop for them when the stores reopen to avail of huge discounts on their stock.

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10 Don’t go overboard on groceries

Think about what your family and guests really like to eat and drink over Christmas and shop with that in mind, financial adviser John Lowe recommends.

“Does anyone in your house eat Christmas cake, Christmas pudding, or mince pies?” he says. “Do they drink sherry, or do you buy it ‘just in case’?”

In the same vein, don’t go overboard on stocking up on wine to give anyone who drops by with an unexpected gift for you. You can always buy more – the supermarkets are only closed for one day.

How to be financially prepared for Christmas 2023

If the constant radio, TV and social media ads flogging “ideal” Christmas gifts are making you feel overwhelmed by the cost of this festive season, make a vow now to be financially prepared for Christmas 2023.

The new year – just four weeks away – is the opportune time to tot up the total amount you spent over this Christmas and create a savings plan that will tame the cost of Christmas 2023 and ensure you don’t wake up to a debt headache every January.

If, for example, you spent €1,000 on Christmas this year, this is the amount you’ll need to save before you start shopping in November 2023. Set up a deposit account at your online bank (but don’t expect to earn much interest) or open a Vault in your Revolut account and make sure €100 a month automatically goes from your main account into your savings pot.
It can be difficult to commit to savings if you’re just keeping up with heating and electricity bills – almost half of Irish households are currently struggling to make end meets, according to the Central Statistics Office. But starting to save for Christmas in January will help you sleep better next year.

If you do have any money left over from this Christmas, John Lowe from Moneydoctors.ie advises going shopping when the sales start to stock up on items you’ll need in 2023.
“Wrapping paper, Christmas cards, tree skirts and paper advent calendars all go on sale a few days after Christmas Day, so get in the habit of snapping them up at 90pc off and storing them up for next year,” Lowe says.