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Driving home for Christmas? Whatever your plans, they’re guaranteed to put a Santa-sized strain on your finances. So just as you would when buying a new car, it’s important to plan ahead and be realistic. That’s right… it’s Christmas budget time. Made Simple.

Step 1: Work out your actual monthly spend and what’s left to play with

The boring basics of a budget are that your long-term outgoings don’t exceed your income. You may be surprised, though, about what you actually spend each month. All those spontaneous cold-morning lattes add up, so instead of relying on guesswork, sort through your bank accounts and credit card statements from the last few months. Leaving nothing out.

Organise your sums with a simple spreadsheet

Firstly, don’t be put off by the idea of a stuffy spreadsheet. To lay it out, include the names of each expense and source of income in your first column, followed by a column for each of the past three months, and one more for your monthly average.

When you’re ready to fill it in:

  • Categorise expenses in detail. Motoring, for example, could be split into petrol, parking, road tax, dangly scented trees and so on. The more detail you add now, the easier it will be to adjust your spending later.
  • Don’t count anything twice. If you put £20 of mince pies on your credit card, and then pay off the full amount with your current account, only include one of the costs in your budget.

Or make it even easier with free budgeting apps and tools

If you don’t have the time to put together a detailed budget manually, and you just want a fairly reliable figure to guide your Christmas spending, an app may be all you need. Here’s our quick summary of a couple of the most popular ones:

Yolt – Perfect for simple budgets that update in real time.

·         Synchronises with your bank accounts and credit cards, then automatically sorts your expenses into a wide range of categories

·         Gives you a ‘true balance’ estimate in real time, factoring in upcoming expenses, so you know what’s left until payday

·         Helps you create a budget and tracks your spending to keep you between the lines


Moneyhub – More advanced insights for longer-term budgets.

·         Takes your properties and assets into consideration as well as bank accounts and credit cards

·         Compares current spending to previous months, with specific tips to meet your targets

·         Able to pair with other finance apps, warn about weak investments, and predict future cash flow


Step 2: Plan for the Christmas of your (wallet’s) dreams

Now you’ve figured out what you can afford (total monthly income - average monthly outgoings + anything you’ve set aside for Christmas), the fun can begin. But before you go bounding off to Amazon like a puppy into winter’s first snowfall, you should make a plan and stick to it. Impulse internet shopping can be a disaster.

Make a list, check it twice, know if your spending is naughty or nice
Easier said than done, but try to remember that Christmas is only one day. We’ve all seen the toddler who spends more time playing with the box than the toy, so only give what you can afford.

Categorising your spending will make it easier. So split up expenses into ‘Decorations’, ‘Food’, ‘Gifts’, and ‘Others’. ‘Others’ might include an ugly Christmas jumper for the office, tape and ribbon for wrapping, and extra petrol for your last-minute, how-did-we-forget-it dash to the shops.

It’s a good idea to save ‘Gifts’ for last, as this is where most people tend to overspend. By sorting out your tree and turkey first, you can simply divide what’s left between the people you have to buy for.

Here's how you might lay it out:


Step 3:  Hit the shops and stick to the plan

Where you forage for must-haves is up to you, but we still have a few last words of wisdom to keep you on track during your shopping spree.

  1. Stick to your list. Avoid scrolling through page after page on Amazon and clicking on ‘similar items that go great with your purchase’. You don’t need them!
  2. Update as you go. If a gift turns out to be cheaper than expected, or you couldn’t resist upgrading to the deluxe turkey, update your spreadsheet and adjust your budget as appropriate.
  3. Keep up the habit. Continue budgeting through the new year and beyond, setting aside a little each month. That way, by the time next Christmas arrives, it will already be paid for.

Follow our advice and this year you could be enjoying a white Christmas with your accounts firmly in the black. All that’s left to do now is pass the stuffing.


Download your own festive template here