Christmas is approaching and, with it, extraordinary expenses that we do not always know how to face. Therefore, in this article we will explain some tips so that our personal finances are not affected more than necessary in this very special time.
First of all, let’s be foreseeable
We must advance purchases as much as possible, avoiding last-minute purchases and taking advantage of offer periods
As we all know, the dates closest to Christmas tend to see a price increase in many products, especially related to gifts or food. This happens because last-minute purchases are compounded by the fall in production due to the holidays. In other words, less supply and more demand, pushing prices up.
Like it or not, this is the dynamic of any market economy. We cannot prevent it, but we can minimize its impact on our financial health. Therefore, the first thing we must try is to face these dates with foresight.
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Being proactive consists, mainly, in advancing as much as possible the purchase of gifts. We must avoid last-minute purchases, and if possible, take advantage of the offer periods. In the United States, more than 76% of consumers buy their Christmas gifts during Black Friday for this reason.
However, it is also possible to be even more farsighted and think about next Christmas from the July and August sales. And if this is not possible, purchases can always be delayed until January, an option chosen by 20% of Spanish consumers.
Forecast, even in food!
Frozen foods are a good option to advance our purchases aimed at family meals
As for food, it is clear that not all of them can be bought so far in advance. However, many can be kept in the freezer for months, which allows us to advance your purchase.
Thanks to this we can avoid the traditional rise in prices around Christmas, helping us to reduce the cost of family meals. For this reason, it is important to know which products tend to increase in price in our country and, as far as possible, buy them in advance.
Here we cannot point out specific products, since as we can see in the upper graph, in this sense the Hispanic world does not present many common patterns. The variety in the region’s gastronomy means that the most demanded foods change completely from one country to another. In Argentina, for example, the three products that became more expensive in December are cuts of beef. In Spain, on the other hand, the meat that tends to rise the most in price is sheep.
But the differences are not limited to meat: in the countries closest to Ecuador, the demand for plantains tends to grow on these dates, something that does not happen in the rest of the region. Fish, for its part, occupies a prominent place in Spanish, Peruvian and Chilean gastronomy, but it is more relegated in the rankings of other countries.
Alternatives for a good family dinner
There are a wide variety of possibilities to prepare family meals, avoiding the most expensive foods on these dates.
Now, what happens with fresh food, which cannot be bought so far in advance? As we have just seen, some of the most expensive products are potatoes, bananas or eggs, which cannot be frozen.
In these cases, the only saving alternative that we have left is to look for recipes that use ingredients other than those traditional for Christmas gastronomy. In Spain, for example, we should avoid lamb or fish. Let us remember that in 2021, these were the products that increased in price the most in December, 7.5% and 6% respectively.
On the internet we can find a wide variety of recipes for family meals with the alternative ingredients that we want to use, and this can save us a lot of money. Sometimes it is not necessary to completely change the recipe, but to look for cheaper substitutes. If we live in Argentina, for example, we can resort to pork or chicken meat to replace beef.
On the other hand, if we want to keep the more traditional products, we must know that we will pay a premium for them at this time of year. If so, it is essential to at least have a budget that allows us to plan these expenses in advance.
The importance of a good budget
It is important to review our income and expenses in advance, see how much we can spend, and based on that, decide what we buy
As we have explained in previous posts, having a personal or family budget is essential to order our expenses. In this case, it is a question of including an estimate of the expenses related to Christmas. We cannot pretend to put an exact figure, but rather a maximum limit that we can afford, which we must strive not to exceed.
Budgeting for expenses may seem like a trivial thing, but it can actually make a world of difference for the most cost-strapped families. For many, Christmas shopping is done first and then it is decided how it is paid for (with regular income, savings, debt, etc.). However, this is a mistake.
In fact, it is advisable to go the other way: review our income and expenses in advance, see how much we can afford to spend, and based on that, decide what we buy. The difference is fundamental, because spending the month of December saving less than usual is not the same as arriving in debt in January.
It is about living more austerity for a few weeks, to compensate for the extraordinary expenses of this time of year
Depending on the situation of each one, it may be necessary to review the budget in its entirety, not just the Christmas expenses. This means that if we don’t have room to meet the expected expenses, we may have to cut others.
This exercise should focus on superfluous expenses, not on things that we need on a recurring basis. Lowering the phone bill or canceling a subscription that we don’t use is always a good idea, but here we should focus on other things. We can reduce going out to the movies or restaurants, or moderate superfluous purchases.
Another way to give
Alternatives like the invisible friend allow you to make less, but better gifts, reducing the total cost for families
As for gifts, in recent years the tradition of invisible friend. This custom, which has taken root in a particular way among young people, consists in that within a group of people, each member must make only one gift. The beneficiary of that gift is chosen by a secret lottery before it starts, and usually a maximum spending limit is set.
The main advantage of this modality is that it avoids spending a lot of money on a large number of gifts for many people, without being able to think too much about what to give each one. Instead, we can spend more time and money to make a more special gift to a specific person.
In this way, the quality of the gifts is prioritized over the quantity. Without forgetting, of course, that the total cost for families is also reduced.
The end of company dinners?
It is about looking for alternatives that strengthen the team spirit, while reducing the cost for the organization
Lastly, if we have a company we should know that alternatives to the traditional Christmas company dinner have been consolidating in recent years. In most cases, serving a cocktail instead of a full menu dinner.
However, other activities such as participation in charity events or workshops organized by the company are also becoming popular. In any case, these are alternatives that allow you to strengthen the team spirit, as occurs with dinners, while reducing the cost for the organization.
In short, here we have discussed some general tips to reduce the impact of Christmas on our pockets, but the circumstances of each one can teach us many more. For this reason, at Economipedia we encourage our readers to put our advice into practice and comment on their experiences.