Will you have enough money for Christmas 2021?

Back in June we published an article called It’s Midsummer. Time to start planning for Christmas?!

The article suggested that, even though Christmas was at that stage still a few months away, you could already start thinking seriously about:

Now here we are, with Christmas only a few weeks away. If you followed our advice you would by now have most of the money you need for Christmas and already be well into your Christmas shopping . . . 

But what if that’s not the case? 

Will you have enough money for Christmas 2021? If not, what can you do about it?

In this article we look at how to work out how much money you need for Christmas, and what to do if you don’t think you’re going to have enough.


How much money do you need for Christmas?

One thing’s for sure. We always underestimate how much we are going to spend at Christmas!

This is particularly true this year, because Christmas 2020 was not the usual kind of Christmas due to Covid-19. So we need to think back to Christmas 2019 to get a more realistic idea of how much Christmas costs.


  • The average cost of Christmas in the UK

According to research by You Gov, the average amount of money an adult spent on gifts in the UK in 2019 was around £500. 

But it’s not just gifts. If you start adding to this amount the costs of food, drink, socialising, travel and possibly accommodation, that cost could easily double. At least.

With that in mind, it’s now time to work out how much money YOU need this Christmas.


  • Setting your Christmas budget

As many of us know only too well, spending too much money at Christmas can have a knock-on effect throughout the year. It takes us ages to get back on our feet again. 

Also if you know you are overspending during the festive season, that is going to make you feel stressed and could prevent you from enjoying Christmas the way you want to.

So the next thing to do is make a budget for what you will spend this Christmas. 

First of all sit down and make a list of everything you might need to spend money on for Christmas. For example, gifts, cards, decorations, food and drink, socialising, family visits etc. Estimate the amount of money you could expect to spend on each item. This gives you a total budget for Christmas 2021.

You now need to work out whether or not you can afford this level of spending.


What can you afford to spend this Christmas?

If you have enough money for everything in your Christmas budget, that’s great. You can stop reading now and get on with your Christmas shopping!

But many people will be in the position where they don’t have that money. If that applies to you, first of all work out what money you do have available. Deduct this from your Christmas budget so that you can see by how much you are short.

You then have three basic options:

  • Reduce your Christmas budget to match the money you have;
  • Increase your Christmas money to cover everything in your budget;
  • Some level of compromise i.e. a bit of both the above.


So let’s look briefly at:

  • Five ways to reduce your Christmas budget .
  • Five ways to increase your Christmas money.


Five ways to reduce your Christmas budget

1. Spend less money on gifts

If you’re feeling the pinch, then others are likely to be in the same position. So this year why not agree with family:

  • To set a strict spending limit on each gift;
  • Just to buy gifts for the children;
  • Clubbing together for a Secret Santa rather than everyone buying gifts for everyone else.


2. Start your Christmas shopping NOW

The sooner you start, the longer you will have to find suitable gifts at good prices. You will avoid the last minute rush and the danger of panic buying. 

And remember that Black Friday will be here at the end of November. 


3. Consider alternative sources of gifts

Don’t assume that you have to buy from certain retailers, or even that you have to buy things new. A lovely second hand gift – such as vintage clothing, an old book, or antique household item – can be a much more special gift than something mass produced. 

Or why not consider either making something yourself, or creating a voucher to pledge your time to someone. For example offering to babysit, cook a meal, or paint their living room.


4. Simplify the socialising

Christmas is all about spending time with people we want to be with. But that doesn’t mean it has to cost a small fortune. Instead of pubs and restaurants, why not get together in homes instead? 

Gatherings for drinks and nibbles, or shared suppers or takeaways can be just as much fun but cost far less money.


5. Cut down your Christmas food bill

Whether you are hosting Christmas lunch or just at home with the family you can cut down your Christmas food bill. The key thing to do is plan ahead so that you know what your menus are going to be then just buy what you need for those meals. 

Don’t fall into the trap of thinking that you must buy certain things just because it’s Christmas. You are free to eat whatever you want to. The important thing is that you eat things that you enjoy rather than what you feel you “should” be eating.

Also don’t go overboard in terms of the quantity of food you buy. Think carefully about portion sizes so that there is enough, but don’t overbuy and give people too much food as a lot is likely to be wasted if you do that. Which is like throwing money down the drain.

And as with your Christmas gifts, start buying food early – for example frozen and non-perishable items – so that you gradually build up a supply of what you want and avoid last-minute panic buying.


Five ways to increase your Christmas money

1. No spend November

This may be a challenge, but if you really want to enjoy the Christmas season it may be worth the sacrifice. For the month of November, cut out all non-essential spending. For example:

  • Nights or lunches out;
  • Takeaway meals or coffees;
  • Alcohol and/or tobacco;
  • Using the car when you don’t really need to;
  • Buying clothes or anything else that is not urgent;
  • Hairdressers or salon appointments.

It’s only for a month, and could potentially save you enough to make up the money you need for your Christmas budget.


2. Taking on extra work

If there are any opportunities for overtime or extra shifts in your current place of work, put yourself forward. Or you may be able to pick up an additional temporary seasonal job elsewhere in the evenings or at weekends.


3. Offering your services

If there don’t seem to be any opportunities around for extra work, create some yourself. Offer your services locally for whatever you are skilled at. For example babysitting, pet sitting, cleaning, garden clearing, decorating, DIY and odd jobs. 

Also many people are very busy at this time of year so may appreciate help with Christmas preparation, such as buying and addressing cards, buying and wrapping gifts, or sorting out the Christmas tree and decorations.


4. Selling unwanted goods

We looked earlier at the idea of buying Christmas gifts that are more individualistic than mass produced. On the same theme, do you have items that you no longer need or want that may be of interest to others? 

This is something that you can do all year round, but with Christmas in mind do you have any of the following items to sell?

  • Unused Christmas lights;
  • Unwanted Christmas decorations;
  • Party items;
  • Christmas party clothing;
  • Good quality children’s toys and books;
  • Vintage or antique items that could make good Christmas gifts;
  • Smaller items suitable to use in homemade advent calendars or Christmas crackers.

It’s definitely worth having a good look through your stuff and trying to see it through other peoples’ eyes.


5. A short term loan

Another option to boost your Christmas finances is a small short term loan. This should not be taken lightly, as any loan is a serious financial commitment and you need to be confident that you can meet the repayments.

But if the alternative is resorting to credit cards, a short term loan may be better. You will know in advance exactly what you have to repay and when, whereas with a credit card your debt can just keep going up and up. So if a short term loan may be a solution you want to explore, get in touch with Loans 2 Go to see how we might be able to help.


We hope that this article helps you to work out whether you will have enough money for Christmas and, if not, how you might be able to remedy the situation.

Remember to check back here soon for more financial and lifestyle tips from Loans 2 Go.