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How to have a financially smart Christmas

It’s a time of year that tests even the most strong-minded of money managers. it’s a time when people end up in debt, and wish they could escape debt in the New Year. Whether it’s a passion for gadgets (iPhone, iPad); a rush round the shops for a new Christmas dress; the temptation of lovely food; or the desire to make your childrens’ wildest gift dreams come true, it’s an expensive time.

But it doesn’t have to be a financial hangover in January if you plan ahead in December. Here’s how to budget for Christmas, and have a happy Christmas without breaking the bank. This is my checklist for handling the family finances to ensure that I can be generous with my gift-giving, but cool-headed with my purchases:

Stay out of debt this Chrismas
How to budget for Christmas

1. Decide on a budget. Calculate what you can afford for the whole of your Christmas that includes food and drink, eating out, party-going, new clothes, presents and hotel costs. Girls, that means you have to include the spray tan and manicure for the Christmas ball in the calculations, no cheating.

2. Set aside a portion of your budget for presents, and make a list of what your friends and family would like. Take this list shopping (or use it to shop on the internet). This saves time, stops you buying rubbish and panicking at the last minute and spending lots because you feel guilty.

4. Shop when you have plenty of time. Impulse purchases are often the most expensive, and the least appropriate.

5. Personalise your gifts. If you are on a really tight budget this year you can spend time instead making a gift that means something to you and the person who will receive it – maybe a framed photograph or something you have made yourself.

6. When you have bought all you need, STOP. It’s easy to get carried away in the last few days before Christmas, especially with the wall-to-wall ads of perfect, happy families. You probably already have more food and more presents than you need, so don’t be lured into buying more.

7. Use a smart credit card that gives you plenty of time to pay back your balance.

8.  Price comparison websites are an easy way of cutting the cost of household essentials.