Image courtesy of Katherine
Image courtesy of Katherine

With Christmas hardly over, you may just be glad to forget about the cost of it and have a relief from worrying about money for a while. But it could be a lot easier if you start planning and budgeting already.

Many people find that the best way that they can afford Christmas is to save some money towards each month. There are savings schemes that you can use for this or you can open a savings account and do it yourself. The savings account probably gives a better return but you have to be sure that you will not dip into it. You want to make sure that you will have the discipline to keep paying into it and not to draw any out. If this is a problem for you then you might be better to find a Christmas savings scheme that locks the money away. Do be careful though because some of these will only allow you to spend the money in certain places. For example there are some companies that allow you to spend the money on Christmas hampers and gifts. Although these are things that some people want, you do need to make sure that you are one of those people and bear in mind that the stock they hold may change by next Christmas.

Starting saving in January can be difficult. It is usually a month when payday will not come soon enough as it has been a long time since the December pay as people often get paid early in December. You may not feel like saving then. However, you can still set up your savings. You can open a savings account ready and set up a direct debit into that account each month but start it form February instead. This should still give you enough time to save a significant amount of money before you need it in November or December.

An alternative thing to do is to start buying things early and get them through the year. So in the January sales you could buy reduced wrapping paper, cards and some gifts. Then through the year you could buy different bits and pieces. Although you will not earn interest on the money, like you would if you put it in a savings account, if you thought that you would not be able to keep it in there without being tempted to spend it anyway, then it would make no difference. Interest rates are also very low at the moment as well which means that you will not get a lot for keeping it in a savings account anyway. You do need to be careful doing this though making sure that you keep a note of what you have bought and where you have put it so that you do not accidently buy too much. This can work well for gifts but you will still need to consider the food that you will buy. If you spend a lot more money on food in December then you should work out how you will budget for that. If you buy the rest over the year and finish shopping nice and early then finding the money for the food should be a lot easier.