Tips to Determine Your Gift Budget for This Holiday Season
  • November 16, 2021
  • admin

Tips to Determine Your Gift Budget for This Holiday Season

You may not want to be the least generous gift-giver, but it is just about figuring out the way to cut back on your gift budget, so you do not end up running out of money for other expenses. You all know that you need to find a balance between your gift budget and other expenses, but finding it is a real finesse.

If you do not want to have your account in the red after the holiday season, you should carefully set the limit for your holiday budget and stick to it no matter what. According to a survey conducted last year, the average British adult just spent £476 on Christmas gifts compared to £513 in 2019.

However, it was not just the impact of the pandemic on finances that forced people to cut down on gift spending. 28% of participants said that it did not make sense to them to buy gifts for friends or relatives with a lot of restrictions on movements.

16% of participants said that they did not want to harm their savings, and that is why they cut back on the Christmas spending. One in eight Brits told that they were not seeing their relatives and friends.

However, it is expected that the gift spending will likely go up this year because the financial situations of many people have improved, and this year the government does not seem likely to put restrictions on movements of people. Still, it does not mean that you will fritter away money.

How much is it ideal for spending on gifts?

How much money you should spend on Christmas gifts depends on various factors, including your friend circle and income. If you want to whittle down your gift budget, you should not spend more than £100 for a gift for your family member and £50 if you buy a gift for your friend or colleague.

Tips to determine your gift budget

You cannot easily get to these figures straightaway because there are a lot of factors you need to consider to decide how much you can spend. Ask the following questions yourself to decide the gift budget:

  • How much money does your savings account have?

The first thing you need to review to decide your Christmas budget is your savings account. Although you can spend around £100 on a gift for your family member, you still need enough money to have in your savings.

Of course, you will have to bring it down if you are in a tight spot. Make sure that you do not cut back on your retirement fund contribution and emergency cushion. Cut your coat according to your cloth.

If you expand your budget by adjusting other expenses, you will likely end up harming your budget when an emergency pops up and probably you will be applying for agent loans to your door.

  • How many people are you buying gifts for?

Just knowing how much you have to spend on gifts is not enough. You need to find out whether everyone for whom you are going to buy gifts falls within your budget or not. Therefore, you should try to note down everyone’s name for whom you are buying a gift.

Once you have made a list, the next step is to mention the amount of money you can spend on their gifts. Now add up, so you get to know the total cost. It is good if it meets your budget. If it crosses your budget limit, you should figure out how you can bring it down.

  • What are your other holiday expenses?

Holiday expenses do not just include gifts. They also include other expenses like decoration, parties, and trips. At the time of preparing a gift budget, you need to ensure that you will not have a problem with funding other expenses.

Although you can take out 12 month loans for bad credit and no guarantor, it does not mean that you will throw your caution to the wind. You should try to meet all of your Christmas expenses with your savings, but you can borrow money if you have fallen short of cash. Since you will be paying down the debt in fixed instalments, it will not put a lot of burden on your finances.  

  • Are there any upcoming expenses?

The next thing you need to focus on is if there are any upcoming expenses. Make sure that you will have enough money to meet them despite dipping into your savings for Christmas expenses. Do not forget that sometimes financial emergencies pop up.

For instance, what if you lose your job and you end up applying for loans for unemployed. The impact of the economic recession is still there, so you should batten down the hatches for such unexpected financial situations.

However, it does not mean that you cannot take out a loan for the unemployed if you need money. It is crucial to ensure that you borrow money that you can afford. You will have to pay off the debt in a lump sum on the due date and probably out of your savings. If you cannot afford to repay the debt, you will likely fall into a debt spiral.

  • Avoid falling prey to peer pressure

If you do not want to spend a lot of money on buying Christmas gifts for your friends and family, you should avoid succumbing to peer pressure. Most of the time, people buy expensive gifts because they feel that it does not feel good to gift someone less expensive gifts.

Do not forget the fact that everyone’s financial condition is different. Even if your friends or families have gifted you an expensive gift, you do not need to cross your budget limit to return them the same favour. You can get this opportunity next time.

It is crucial to remember that how much money you have spent on gifts. If you cross your budget limit, you will end up borrowing money for other regular expenses.

Most people find themselves in a tight spot after the celebration because they do not realize their spending limit. Overspending will not just hurt your budget but will increase the threat of falling into debt.

  • Plan beforehand

If you are not aware of how much money you should spend on gifts for your friends or family, you should talk to your loved ones. Of course, even though there is some scope in cutting back on the budget for your friends, you cannot be rigorous.

You will have to maintain a certain standard. Talk to your loved ones like your parents or significant other about how you can buy an affordable gift that seems good for the Christmas celebration. Further, as far as it is about buying gifts for your family, you can bring down your expectations.

You should openly talk to your family and tell them that you do not have enough money to pay for their gifts. This open discussion can avoid any kind of argument due to the gift. It is not possible to bring down the budget for the gifts of your friends and colleagues because you cannot lower down your status and respect to save some money. You can save that little money by adjusting the budget for gifts for your own family.

The bottom line

If you do not want to overspend money on Christmas expenses, you should always be careful about your budget. You need to find out how much money you have and how many people you are buying gifts for, your planned upcoming expenses, and you should set aside some money for financial emergencies. The tips mentioned above can help you determine the gift budget for Christmas.

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