Is it too early to start thinking about Christmas 2020? It’s not unusual for us to speak to clients who are looking to consolidate credit cards debts into their mortgage following a Christmas splurge. Whilst this will cut down their outgoings in the short term, it is no way to run their financial planning.

So, to avoid the post-Christmas headache when the bills arrive and your next pay day isn’t until the end of January, it’s a good idea to get a plan in place now.

We believe that budgeting is a crucial life skill which everyone should learn. As my first boss said to me, ‘If you earn £100k per annum and spend it all, you will end up in the same situation as someone earning £15k who spends it all’.

So where do you start?

Keep a list to track your spending

It might sound simple but write down a list of everything that you buy at Christmas, even those presents you buy yourself when you go out shopping for others. According to the Money Advice Service, the average household in the UK will spend around £500 over the festive season. This will probably sound like a lot to some and not much to others, but apparently this is the average.

Open a dedicated savings account

Creating a new savings account or goal account within your online banking is easier than ever with the likes of Starling Bank and Monzo Bank. By setting aside £67 each month just after payday (around £2.20 per day) you would have £800 for Christmas next year.

If you do this for other large annual expenditure which is likely to continue year on year for example holidays, car services, golf club memberships, you should find that you have the basis of a basic financial plan, and hopefully some disposable income which can then be used to plan for the future.

Need more budgeting tips?

More useful budgeting tips can be found on the following websites:

Government run Money Advice Service: https://www.moneyadviceservice.org.uk/en/categories/budgeting-and-managing-money

Martin Lewis’s Money Saving Expert website: http://www.moneysavingexpert.com/shopping/christmas-savings

Have a question?

If you have a question about financial planning we recommend that professional advice is sought with your financial adviser before taking action. Get in touch with a member of the Johnston Carmichael Wealth team.

Disclaimer: While all possible care is taken in the completion of this blog, no responsibility for loss occasioned by any person acting or refraining from action as a result of the information contained herein can be accepted by this firm.