Christmas is a very big festival. It involves a lot of fun from shopping to worship of Jesus, but it also shrinks the size of your savings. Everything from decoration to gifts counts. This is the time you will likely fall in debt. Christmas debt is very common. More than half of the borrowers fail to pay it off and eventually fall in a debt cycle. Where did they slip up? As the time for Christmas preparation comes, you should start budgeting.
You may think that it is too early to create a Christmas budget, but it will prevent you from stress during festival. If you know beforehand about your cash inflows and expenses you may afford to incur, you will know how much amount you can borrow with Christmas loans. Secondly, you will have enough time to compare deals. A few lenders increase interest rates during the festival to earn profits. Beware of them. Instead, borrow money with reputed lenders like The Easy Loans, AOneFinance. Preparing a Christmas budget is no picnic but it is also not impossible. Here is how you can create it.
Look over monthly cash flows
Before you create a budget for your upcoming festival, you must know where each penny is going. Otherwise, your finances will put you off track. You should take stock of your spending, saving, investment and the like. First off, you should make a record of all of your income sources. Income is everything you receive. It includes your paycheque, side gigs, business income, dividends, interests and rental income. You can also include income you earn by selling your items. Once you have recorded your income, the next step is to consider your expenses. Your Christmas budget will be decided based on income left after meeting all your regular monthly expenses. They include rent, food, credit card bills, mortgage payments, travel, utility expenses, and so forth.
This will help you exactly know about your net worth. Regular expenses are extremely important. You cannot afford to have cash shortfall to pay them. Otherwise, you can fall in a serious financial problem. You know that Christmas is in December, so you do not need to be flustered if you do not have positive net worth. Start stashing away money. Make a list of things you will need for the festival such as clothes, gifts, decoration, food and party. You can take an idea of how much money you need to save from your previous Christmas expenses and accordingly fill this table.
|List of expenses||Amount to be put aside|
|Gathering (Food and Wine)||£…|
Budget for gifts does not need to be massive
Gifts are an integral part of Christmas and it consumes a large proportion of your budget. You should find a perfect gift for your each family member. Remember that it is not about how much you are about to spend in it. You should focus on getting items you and your family needs. It is possible that your budget is smaller than someone who needs expensive gadgets. To enjoy the festival on budget, make sure that you are about to buy gifts you need. Note down how much you need to spend on each person. If you have set aside £100 for gifts and your shopping spree wraps up in £70, you should put rest money toward other things or you can retain them. It is not necessary that you will spend whole of the money. The best way is to maintain a record of your each expense so that you can track it later.
|Dad||Music system||£180||£190||(-) £10|
|Kid 1||Story books||£20||£10||£10|
The bottom line
Christmas budget will help you a lot to save your money. Try to start setting aside money as soon as possible so that you do not need to rush into applying for a loan even for smaller expenses. Make sure that you stick to your budget. Your spending should not be beyond the limit you have decided.