19 November 2023 , 07:00
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With its bright lights, cheery music and messages of goodwill, Christmas is meant to feel like the happiest time of the year. But for some, even though ‘tis the season to be jolly, it’s also a time of financial hardship and worry, with even more strain on already stretched purse strings. And this year, the nation’s households are going to be a staggering £3 billion worse off compared with the 2022 festive season.
“Sadly the cost of living crisis looks set to have a serious effect on households this year, making it harder for people to feel the Christmas cheer,” explains Adam Bullock, UK director at TopCashback. “It will be very rare that a household will not be affected by the cost of living crisis this Christmas.”
As a result, celebrations for the 2023 holiday season could look very different. Having experienced money issues in the past, Maddy Alexander-Grout, 40, knows first-hand what it’s like to have to scale back the festivities and is buying all of her presents either secondhand or in the sales after experiencing a “bumpy” 12 months.
“Ten years ago I was £40,000 in debt,” she tells us. “It was a really scary time for me and I began receiving letters from debt collectors and I ended up with bailiffs at my door. I packed up my stuff in the middle of the night and moved back to Southampton where my family lived to start a new chapter. That Christmas I had to have some very difficult conversations with family and friends as I told them about my situation and that I couldn’t afford to celebrate the way I was used to doing.”
Mum-of-two Maddy made her own gifts
Agatha has been worrying for monthsMaddy’s story of cutting back at Christmas isn’t unusual, particularly in today’s climate. While the big day may be more than a month away, 44% of Brits say they have committed to reduce non-essential spending to help cover the extra outlay.
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Great Expectations
For Agatha O’Neill from Tunbridge Wells, increasing living costs mean that she’s been left figuring out how she can cope with the extra expectations for Christmas. “I don’t make ends meet in a normal month, so how am I going to do it?” she says. “I’ve been doing extra bits, like using TopCashback or using Vinted to sell things to get me to the end of the month, but I already live paycheque to paycheque.”
While many of us may be preparing for a more purse-friendly Christmas, it’s hard to deny that there’s an expectation to splash out on celebrations. In December alone typical household expenditure rises by 29%.
This is something that resonates with 39-year-old Agatha. The pressure to have a perfect Christmas meant that the single mum started worrying about the festivities back in September.
“As a parent, you really want to make it as special as possible, and it’s really heartbreaking when you can’t do that. My son is 14 so the presents he wants are tech that I can’t afford,” she explains. “It makes me feel like a failure. The reality is it’s not a failure in my parenting. It’s a reflection of the current economic crisis.”
And Maddy, who is a mum-of-two and is now a money specialist and founder of the Mad About Money app, says that while her friends and family were accepting of the financial situation she was in, societal expectations left her ridden with guilt.
“Normally I would spend £300 to £400 on Christmas presents for everybody. The issue I had was that pay day came earlier in December so I’d really struggle in January,” she tells us.
“My friends and family told me not to get them any presents, but I felt guilty so I made my own gifts, went charity shopping and visited car boot sales. I was so nervous to give out my presents because I thought I was being a massive cheapskate.”
Work to a budget
Despite it all, both Agatha and Maddy are keen to emphasise that Christmas isn’t all about the gifts. And while it’s easy to get worked up about the Christmas that we can’t afford, Oli Townsend, deals expert at MoneySavingExpert, encourages us to reframe our thinking by focusing on the Christmas that we can manage.
“Many start their Christmas preparation by creating a huge list of everything they want, then panic about how to afford it, and worry about a financial hangover in the New Year,” he says.
“Instead, work out your budget before you start planning and then ask, ‘What’s the best possible Christmas we can have on that?’ to relieve pressure, increase happiness, and avoid the nightmare before, and after, Christmas.” Even now, a decade on from having those difficult conversations with her nearest and dearest, it’s a lesson that Maddy values.
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She says, “Last year I spent about £120 on all of my Christmas shopping, including two new scooters for my kids for £7 each. Nine times out of 10, people don’t care what gifts they get. Sometimes they don’t care if they get anything at all. It’s much nicer to spend time with loved ones.”