All the money discussions to have with your family now about Christmas
Have honest, open and non-judgemental conversations with your family to avoid tension and disappointment on Christmas Day, say experts.
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Unfulfilled expectations and the looming fear of debt can quickly put a damper on Christmas Day, so it is important to plan ahead and get the awkward financial conversations out of the way.
Excessive spending during the festive season can leave us feeling less than wonderful in January, so here are some tips on how avoid overspending and make sure the whole family are on the same page…
Be open and honest
Setting clear expectations ahead of time can prevent stress and awkwardness.“Speak directly to your loved ones to understand their financial situations better and communicate yours openly as well,” says Rajan Lakhani, personal finance expert at smart money app Plum. “This means you will all be on the same page when it comes to buying presents or sharing Christmas expenses.
“It can feel like quite an awkward conversation, but you may find that others in your group have been having the same worries and will be relieved to get it out in the open.”
Share out the labour and costs of Christmas lunch
“We’re still in a cost of living crisis and the cost of turkey and trimmings can be higher than people expect,” highlights Lakhani. “Many families arrange for each person to bring a dish as a contribution, which cuts down labour as well as cost for the host.
“Arrange a contribution from each individual adult rather than per couple, so single people don’t end up shouldering more of the load.”
Also, consider asking guests to bring a bottle or two.
“You can potentially save hundreds of pounds if you take alcohol out of the equation,” says Amy Knight, NerdWallet UK’s personal finance expert. “Ask guests to bring a bottle of whatever they’d like to drink so that you only have to fork out for the food.”
Set spending limits on presents
“Speak to your friends and families about spending limits and boundaries for presents, either in the amount of money spent or the number of presents bought,” advises Rachel Kerrone, personal finance expert at Starling Bank. “This will then make sure you don’t spend more than you can afford, and will help avoid feelings of guilt for spending less on presents.”
Opting for Secret Santa or agreeing on an age cap on kids’ gifts can help keep costs down.
“If you have a large family with lots of nieces and nephews, discuss with your siblings what age you stop buying presents for each other’s children,” adds Knight. “For example, those under the age of 10 might enjoy a present under the tree, but tweens and teens who have their own current account may prefer a few pounds to spend themselves.”
Encourage children to be creative with presents
“Children shouldn’t feel pressured to buy expensive gifts. This can set a dangerous precedent for overspending later in life,” says Maxine McCreadie, personal finance expert at UK Debt Expert. “Encourage them to get creative by making something, baking, or offering a kind gesture, such as a handmade voucher for spending time together.
“Teaching children about thoughtful, budget-friendly giving can be a valuable lesson in the importance of the holiday spirit over materialism.”Respect that everyone’s situations will be different
“Gifting can be a great source of pleasure, particularly for relatives who have fewer financial pressures or more disposable income,” says Knight. “Respect your grandparents’ right to spoil you if they can afford it, but be open about the fact that your financial circumstances won’t allow you to spend the same amount in return.”
Don’t be afraid to say no
Be clear about what you’re comfortable with and remember to prioritise your wellbeing.
“Don’t be afraid to say no if you can’t afford something,” says McCreadie. “It’s important to prioritise your financial wellbeing over holiday pressure.
“Remember that Christmas is about spending time with loved ones, not spending beyond your means.”