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  • Emily Friday

Christmas on a Budget | How to Budget for the Holiday Season

Wondering how you’re going to afford Christmas this year?

You’re not alone - according to Finder, people across the UK spent £24.2 billion on Christmas gifts in 2020 and 49% planned to spend less with the most common reason being the impact that the pandemic has had on their finances.

The majority of people in the survey also claimed that in order to spend less, they’ll be setting a price limit on gifts - which is a great starting point for curating your Holiday Budget.

So, with the festive season fast approaching and Stress Awareness Week in full swing, we've released a no-nonsense guide to help you manage your money stress over the holidays and create a budget that works for you.

Read on for our tips on how to create a Christmas budget so that you can enjoy the holidays without racking up the debt!

1) Make a Clear List

“He’s making a list, he’s checking it twice...”

The very first thing you're going to want to do is to create a clear list of everyone and everything you'll need to budget for.

This could range from Christmas presents, food shopping (pigs in blankets and mulled wine for the roast dinner can’t go amiss), new decorations for the tree etc.

Use this list to determine how much you’ll need to save - and factor in any costs that aren’t limited to Christmas Day only. For example, shopping funds for the Christmas markets and travel expenses for fuel and hotels.

2) Allocate Your Budget

mean girls glen coco

Once you’ve made your list, allocate a separate budget for each person you want to buy gifts for.

To do this, you can use an Excel spreadsheet or classic pen and paper - whatever tickles your fancy.

Jot down every possible person you can think of who you want to buy for, and cut this down if possible - for example, those distant relatives or your other half’s pet cat could maybe make do without the expensive gifts this year!

3) Use a Sinking Fund

christmas sinking fund calculation imagenpay

Avoid the 12 Days of Panic Buying with a handy Christmas sinking fund.

A ‘Sinking Fund’ is a fund that you set aside and pay into every month/week in order to save up for something like a holiday, or in this case, Christmas.

To determine how much you'll need to save to accommodate your budget, take the total amount to be spent and divide it by the number of months or weeks you have left until Christmas⁠.

For example, if you needed £250 for Christmas presents by the 1st of December, this gives you around 4 weeks to add money to your Christmas sinking fund - and you'd need to add £62.50 to this fund every week.

You can also try a Sinking Fund calculator to work out how much you’ll need to save for your specific budget.

Finally, plan your shopping ahead of time and shop smart by leaving the credit cards at home so that you can only spend with the money you’ve saved. If you love the convenience of using a contactless card instead of cash, why not try a digital prepaid card like ImageNPay?

There’s no risk of overspending as you can only use the money you’ve loaded onto the card and our digital cards are all Mastercard approved - meaning you can use yours to shop in over 40 million places worldwide!


Download ImageNPay on iOS today to make Christmas budgeting simple AND fun with our new Christmas designs - coming to you this December 👀

Make sure to follow us on our Instagram so you don't miss this exciting release!


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