Have yourself a cost-cutting DecemberTuesday, 8th December 2020
The following article is by Leah Heath, WorkLife’s Financial Wellbeing Support Advisor. From tips on budgeting, to advice on how to save while you spend, Leah’s here to help your employees make the most of their salaries and improve their financial wellness.
It’s no secret to say that this time of year can be stress-inducing for many reasons. In addition to the upcoming holiday season, we have had to contend with living through a global pandemic for the majority of 2020. Sadly, many of us have been affected economically by COVID-19 and that will undoubtedly put pressure on us for any festivities we have planned for the end of the year.
I recently read a report conducted by LCP that found that 32% of people had less than one month’s savings. So not only are they unprepared for any financial emergencies, but due to living from payday to payday, they are also likely to be unprepared for any celebrations.
Because of this, I wanted to share some of my top tips for making your holiday season just as special, whilst keeping your financial wellbeing in mind.
- Ban unnecessary gifts
First and foremost, it is important to realise who you are buying for and why. Over ten years ago, Martin Lewis attributed one of the biggest costs of Christmas to be buying unnecessary gifts. He likens the incessant purchasing of gifts to a “retail festival” and argues that it can actually create an unfair obligation on others.. So, if you’ve ever spent December cursing the amount of presents you “have” to wrap for people you don’t like or haven’t seen for years, then ask yourself if it is really worth it.
- Think about homemade gifts
Those who truly deserve to receive our time and effort when choosing gifts will appreciate something that has taken some time to make. When I was at university and had very little income, I personally opted to make my friends and family’s gifts. Considering my usual clumsiness in the kitchen, my triple chocolate brownies were very well-received by my loved ones. Whether it’s baking, crafting or upcycling, there are plenty of ways you can easily create thoughtful gift for someone, for a fraction of the price.
- Be a part of a potluck party
Do you generally go out for a festive feast with your friends or family? Or do you tend to host a holiday get together that costs you an arm and a leg each year? Whilst the drive to go all-out this year is probably higher than ever, you can cut costs and have just as much fun by organising a potluck party. Discuss between your friends and family members who can host and then each agree to bring a dish to contribute to the meal. This helps to foster a true sense of togetherness, can save the host a lot of money and is just as fun as going out for an expensive meal or hosting an ordinary soirée.
- Favour cheques
You might want to give the gift of no washing up for a week to your other half, a night of babysitting for a friend or even a day of gardening to a neighbour or relative. These favours take you relatively little time to complete, are totally personalised to the receiver whilst costing you little (if any!) money. This is a perfect example of investing your time in someone rather than money you may not have. There are plenty of templates online, or you can create your own if you feel like exercising some artistic flare.
- Try not to borrow for the Holidays
Lastly, and possibly most importantly, you must live within your means. You can track what you are spending and where using the OpenMoney app. It displays an overarching view of all of your accounts which is a great way of ensuring that you are not overspending on where you cannot afford to. If you are doing anything but spending the money you have saved specifically for Christmas, you are at risk of harming your financial wellbeing. There are plenty of money lending companies out there that are targeting those of us who are panicking about how we are going to save face during the holiday season, but if you can’t afford to spend, don’t.
Many businesses such as Klarna offer Buy Now Pay Later schemes to encourage the purchase of items people don’t need or will struggle to afford. Spreading the cost might take the initial sting out of a present, but without a full understanding of how these schemes work, it can lead to debt and credit score problems further down the line.
OpenMoney launched their ‘You Only Pay Once’ campaign to warn people against the temptations of overspending with BNPL schemes and to promote the positive mental health benefits of paying up-front for items you can actually afford outright.
Your financial wellbeing is important, look after yourself this holiday season.
This blog is written by our Financial Wellbeing Support Advisor, Leah Heath. Leah joined WorkLife in October 2020 to help deliver financial wellbeing education into workplaces. As a champion for workplace wellness, Leah focuses on how WorkLife can help employers achieve their wellbeing goals whether it’s physical, mental or financial.