Topic: Personal finance December 9, 2019
Author: Neil Cubley
Tags: Christmas

5 Christmas budgeting tips

Bank of Ireland Christmas budgeting3 MIN READ

Christmas gifts, Christmas decorations, Christmas food and drink, the Christmas list goes on. It’s no surprise that Christmas can be expensive.

In its 2018 Christmas Retail Monitor, Retail Ireland predicted that Irish households would spend an average of €866 more in shops in December than any other month.

So what’s the best way to stick to a budget at Christmas?

1 You don’t have to spend that extra €866!

The first thing to remember is that you don’t have to spend an extra €866.

If money is tight, you might decide to skip Christmas gifts altogether for the adult relatives (and their husbands or wives) and only buy for the children instead.

After all, let’s be honest, you might not want or need all the presents you receive.

We might ‘wish it could be Christmas every day’ but we might not want to shop for it all year long.


You can also talk to friends and family about setting a limit to how much you each spend on gifts.

You could choose to limit them to €20, €30 or €50, for example.

These conversations can sometimes be tricky to have.

After all, nobody wants to appear as if they’re cancelling Christmas.

So you might want to read these tips for having a chat about money with your partner.

Bank of Ireland Christmas budgeting
2 Making a list and checking it (at least) twice

Work out what you can afford to spend this Christmas and write that number down.

That’s your Christmas budget.

Then create a list with the names of everyone you plan to buy a gift for.

Add in costs for the groceries, the tree, decorations, travel and socialising etc

Your Christmas list should have everything you plan spending on it.

Take a tip from Santy and have a list for everything you plan to spend on this Christmas


Now go back and put down how much you plan to spend on each item.

You’ll probably find that that you go over your budget.

That’s all part of the process.

Look for where you can cut back and try again – it might take a few goes to come in within budget.

Keep updating your list as you spend, to stay on top of your spending.

If you overspend in one area, try to cut back elsewhere.

Bank of Ireland Christmas budgeting
3 The cost of Christmas past

We tend to underestimate how much we spend at Christmas.

So it’s a good idea to check what you actually spent money on last year.

Grab last year’s November and December bank statements, credit card statements and receipts.

Anything you don’t remember spending on?

Do you plan to spend on these items this year?

If so add them to your Christmas list and see if you can adjust to stick within your budget.

Maybe you can’t bring everything in within budget and will have to increase it.

But at least you will have a more realistic picture of what Christmas will cost.

We can forget all the little Christmas extras that add up to a lot of spending


The next question is how will you pay for it all.

Have you money saved that you can use?

(Remember: try not to eat into a Rainy Day Fund, if you have one, but keep it for essentials instead.)

Savings are usually the cheapest option.

But remember to build up your savings again as soon as you can.

Bank of Ireland Christmas budgeting
4 Christmas saving 

Ideally, we’d all start saving for Christmas in January and save regularly every month to December.

Putting away €72 a month or €17 a week from January to December would build up a Christmas budget of €866 by the time sleigh bells are ringing.

That’s roughly the equivalent of setting aside the cost of a cup of coffee every weekday for a year.

But we all know that things don’t always work out that way.

Sometimes we just want that cup of coffee.

Traditionally, people have used Christmas clubs to help them spread the cost.

Setting aside money at their local butchers, for example, to pay for the festive feast.

Christmas clubs, gift cards, envelopes – what’s your Christmas saving tip?


Or putting a deposit down at a toy shop for this year’s must-have and paying the rest in instalments in the run up to Santy’s visit.

Alternatively, when they have spare cash, some people buy gift cards for shops they know they will buy Christmas gifts from when December comes.

Clubs and gift cards can work if you’re happy with committing to a specific shop but what if you prefer to spend at several different shops and online?

You could just stick to cash.

Some people have a Christmas envelope and put spare cash into each week to build up enough money for Christmas.

But it can be tempting to raid an envelope full of cash when a bill lands.

Bank of Ireland Christmas budgeting
5 Automate your saving so you don’t forget

Want to reduce the temptation to dig into Christmas savings or to skip saving altogether?

It can be helpful to set up a standing order to pay the money from your current account into a savings account as soon as you get paid.

When money goes automatically into your savings account, you are more likely to save it.

And keeping your savings just out of reach but available when you need them can help make sure that the money is still there by the time Rudolph puts hoof to roof.

If you use your credit card, don’t leave repayment open-ended, set a date for paying it off


But sometimes you can’t save up enough money in time and can’t avoid borrowing for Christmas.

If you are using a credit card then it’s helpful to have a clear plan for repaying the money instead of leaving it open-ended.

For example, if you plan to put €866 on your card and can’t afford to pay off all your balance in January, you could decide that to pay off the balance in 2 months, 3 months or 4 months*.

Set a clear date for paying off the cost of Christmas.

Remember: you’ll pay interest at the rate shown by your card’s Annual Percentage Rate (APR) as well*.

You might also want to check your credit rating to see how healthy it is.

5 Don’t wait for New Year, make a Christmas resolution now

You may have left it late to save for Christmas, this year, but you can still use a gift list and set yourself a budget for the festive season.

And you can always make a New Year’s resolution to make Christmas more affordable next year by starting saving in January.

Find out more

Take two minutes to check your financial health and learn how to improve it with the Bank of Ireland financial healthcheck.

*Over 18s only. Lending criteria, terms and conditions apply. Bank of Ireland is regulated by the Central Bank of Ireland.
Topic: Personal finance December 9, 2019
Author: Neil Cubley
Tags: Christmas

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