Scrooging Your Christmas Expenses



Posted on: 21st December 2022

This may be the year where you say bah-humbug to your usual spending and saving habits. Most people just want to make the most of their festive season and deal with the new year when it hits.

It is understandable why you would want to hold on to every penny possible for the end of the year, especially with January’s tax season rapidly approaching. Of course, just like Ebeneezer himself, there are lessons that you can learn about changing your future over the season of Christmas – and not be scared about your finances whilst doing it. It also plays into your past and present as well as your future.

Here is a Christmas Carol journey through your financial situation to make you feel more secure over the holidays.

Past Mistakes

Christmas is the most expensive time of the year, and you will always try to overcompensate to make it special this year. Realistically, how many of those novelty gifts are never going to leave their boxes and be of any use?

Christmas is fuelled by peer pressure, with companies wanting you to spend more and more for that vision of the perfect Christmas. This is not just in getting presents but also attending panto season for the kids and Christmas parties or long travels to get-togethers with family for the big day.

With today’s rising prices, the costs of tickets, travel and dining out can eat over half of your overall Christmas budget. In reality, Christmas is about spending time together as a family – and vast expense is not required to enjoy time together as a family. After the Christmas week has passed, everything tends to get cheaper and less hectic in the build-up to the new year anyway.

Most clients tend to forget to budget for Christmas. Next year, work with independent financial advisers Cheshire to uncover how much you spend over the Christmas season, divide it by twelve and make a monthly savings plan – allowing your next Christmas to be well prepared for.

Present (Not Presents)

If you are a higher-rate tax player and you make charitable donations using Gift Aid, you can claim back the difference between your rate of tax and the basic rate. That is £25 for every £100 you donate. This can be done through your tax return.

You stand to save even more on tax if you leave money to charity in your will, as this bequeathed money is exempt from inheritance tax. If you give away at least 10% of your estate then the overall rate of inheritance tax drops from 40% to 36%.

Also, if you receive a sizable Christmas bonus in your pay packet this December, withhold your spending urges and put it into a savings account, invest it or add it to your children’s savings – or make an additional pension contribution to benefit from additional tax relief.

Changing Your Future

If Ebeneezer Scrooge can learn a lesson about his wealth, so can everyone. That is, after all, what A Christmas Carol is all about.

The advice on your future is all about saving little and often as the best way to build up your spending power. Focus on the efforts that matter rather than letting hard-earned money to waste. If you have children, you have easily foreseeable financial goals for their leaving school and reaching adulthood. Having a long-term investment strategy with independent financial advisers Manchester is the gift that helps to keep giving, and receiving the best present for your family – security.