• FLM Wealth Management

The biggest festive season spending mistakes (and how to avoid them)

The holidays are a wonderful time full of cheer, good will and shiny new toys! But the joy of it all starts to fade quickly once you start looking at everything you’ve spent on it. It can make January feel all the more stark if you’ve overextended yourself during the festive period.

A lot of the things that lead you to overspend are pretty common mistakes. Luckily, they can also be very easy to avoid!

Not setting a budget

This is the number one spending mistake that people set around the holidays. Having (and adhering to) a budget is a cornerstone of financial planning - so why should Christmas be any different?

The holiday season is rife with opportunities to overspend and it can get out of hand quickly. So setting a budget can help you keep your costs down. Consider what money you really do have spare and set aside a portion of it for gift buying and other festivities.

It can even help to create different budgets for different kinds of spending. You can set up separate amounts for gifts, Christmas dinner, a new Christmas jumper, and decorations. Whatever it is you’ll be spending on this season, make a note of it and set yourself a limit. Come January, you’ll thank yourself for it.

If you end up only taking one piece of advice away, let it be this one!

Falling prey to a good deal

Black Friday, Cyber Monday and Boxing Day deals all inspire us to consider buying things we’d never thought of, pushing our price ranges and buying multiple versions of the same thing. The result? They absolutely wreak havoc on your wallet.

While we all love a good deal, buying things just because they’ve got that discount banner on them won’t be doing your spending any good. If it isn’t something you were planning on purchasing, chances are that it isn’t in your budget.

And, truthfully, those deals aren’t always your best bet for finding something at the right price. If you take the time to shop around, you may find even better discounts than what are advertised during big sales events.

Forgetting your list (and not checking it twice)

We won’t harp on about this too much, but Santa isn’t the only one who should have a list of who is getting gifts this year. When you’re planning your budget and getting your shopping done, it’s important to work from a list!

Take the time to sit down and think about the special people in your life who you want to give to this year. Make sure you get everyone and check your list again after.

It’s often the suddenly remembered cousin or almost forgotten aunt who sends your present budget out the window. Being conscientious and planning ahead can help you avoid any trouble!

Moving money out of savings

This one is bad because it can affect you for a lot longer than just December and January. Your savings are part of your long term financial goals and interfering with them can create an unwanted detour to your path to financial freedom.

Where possible, put money aside separate to your savings for Christmas. This may not always be doable, but anything in your savings account, especially for long-term plans, should stay there.

If this isn’t manageable, be sure to update your financial adviser, in case there are any adjustments they’ll need to make to your plan.

Going credit crazy

This is another festive spending mishap that can have ongoing implications. Although you may have credit cards factored into your normal financial situation, they can cause temptation to overspend.

Because you may not feel the effects of credit spending immediately, putting it all on credit can feel very appealing. But the toll that interest and excessive (unbudgeted) spending can create is significant.

To avoid going overboard, stick to your budget and try not to put your Christmas spending on credit. If you don’t have the funds for a particular item right now, it may not be the best time to buy it.

Spending for spending’s sake

You’re likely familiar with the idea of buying something expensive for someone to show that you are able to. This can happen especially in financially competitive families. But spending a lot on a Christmas present for the sake of appearances can be very detrimental.

Not only does this sort of spending behaviour hit hard during the holidays, but it can also bleed over into other gift buying opportunities. From birthdays to anniversaries and Valentine’s Day, if you start overspending on gifts in one area, it sets a precedent for future events.

Instead, try to think of presents that are more meaningful and less expensive. Many of our loved ones would prefer something that we picked for them specifically regardless of the amount we spent.

With these tips, you should be able to safely navigate your holiday spending and prevent that dreaded moment in January when you realise you went too far. So keep these in mind and happy shopping! Hopefully this will be your least financially stressful holiday yet!


Recent Posts

See All

Floors 2 & 3,

Basildon House,

7 Moorgate, 



020 7710 3402


© 2020 FLM Ltd. 

FLM is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group's wealth management products and services, more details of which are set out on the Group's website www.sjp.co.uk/products. The title 'Partner Practice' is the marketing term used to describe St. James's Place representatives. FLM Wealth Management is a trading name of Financial Lifestyle Management Ltd.