Guide to saving at Christmas

According to a Deloitte study, Spaniards spend an average of 634 euros each Christmas. This isn’t the highest forecast: the Consumer and User Organization (OCU) predicted that each Spaniard would spend around 745 euros during last year’s Christmas.

The bulk of this amount (391 euros) is allocated to gifts, in addition to another 110 euros for meals and celebrations, 107 euros for trips or vacations, and 69 euros for the Christmas lottery. Additionally, the Organization estimates an expense of 32 euros for parties and another 36 euros for meals and celebrations with coworkers.

The same OCU survey reveals that 55% of those surveyed always end up spending more than they had planned. But what can we do to manage all these expenses? Is it possible to save during Christmas? Here are four tips that can help you keep your expenses in check over the coming weeks.

1. Create a budget

Financial planning is essential during spending periods like these. Being clear about the available money and expected expenses will help you get an idea of how much is available for food and gifts. In fact, that’s the first step: look back and review the fixed expenses you’ve had during previous holiday seasons. Variable expenses during these times are much harder to quantify, so it’s advisable to analyze them, determine what’s excessive and what’s not, and set an amount to manage this year’s expenses. The budget for this period can also take into account the extra Christmas pay, which increases the resources available to cover these expenses. In this article, we’ll tell you how you can create your own family budget from scratch.

All this planning will therefore help you manage more cyclical unexpected expenses, both in the short and long term. In fact, at the end of the holidays, the first thing that inevitably follows is the dreaded January slope, defined by the Royal Spanish Academy as “a period of financial difficulty that occurs in this month due to the extraordinary expenses incurred during the Christmas holidays”. We’ll tell you more about the January slope here.

2. Give thoughtfully

Gifts are one of the main concerns during this time of year. Choosing the right gift isn’t easy and involves considering multiple factors: return policies, size, and so on. To avoid buying impulsively and ending up spending your savings on something that will eventually be tucked away in a box, it’s essential to consider who you’re buying for, taking into account their tastes as well as their needs. For example, even if we know that our loved one might be excited about receiving a clothing item, it could be more useful to choose a gift that is more environmentally friendly and offers greater value. After all, not all the best gifts are material. You can give experiences or other meaningful gifts that don’t require a huge expenditure.

In addition, in recent years, many families have embraced formats like the “Secret Santa” exchange, where each person only has to give a gift to one other person— the one they get in the draw. This allows you to give a better gift to the person you’re giving to, instead of having to spread the budget across more people.

3. Share the expenses

The Christmas Eve dinner and Christmas lunch, along with gifts, are the main expenses during this time, especially considering that the products we buy for these occasions are typically of higher quality than those we use regularly. However, the person who organizes the celebration doesn’t necessarily have to bear the cost. Ideally, the expense should be shared, or each guest could contribute a dish.

Changing the menu can also be a great way to save a bit more during this time: instead of lamb, you could prepare chicken, and instead of seafood, a nice hake. Also, keep in mind that some ingredients travel thousands of kilometers to reach your table, so opting for fresh, local, and seasonal products can be a more environmentally friendly choice.

4. Plan purchases in advance

Last-minute purchases are often the culprit behind increased spending during this time, whether for gifts or food. Buying items that experience the highest price increases, such as seafood and fish, and freezing them could be one of the most sensible alternatives Additionally, an essential step is comparison shopping: the price difference between stores can be significant, making this step crucial for saving during the holidays.

Although the need to save becomes more evident at the end of the year, the reality is that we should always be saving to meet all the financial goals we set throughout our lives. Javier de Berenguer, Investment Manager and Fund Selector at MAPFRE Gestión Patrimonial, explains that there are three types of savings:

• Emergency savings: These consist of very short-term liquid investments or cash in your bank account. They are meant to cover unexpected expenses, such as a car breakdown.
• Savings for planned expenses: A perfect example of this would be saving for your children’s university education. With these funds, you avoid using private financing, for which you would always pay interest.
• Retirement savings: These are often referred to as finalist savings. Currently, this is the most urgent type of savings to cover in Spain, as it helps prevent the loss of purchasing power when we stop working.

The way to save for each of these cases varies, especially depending on the time frame: the same investment vehicles are not used for long-term goals, like pension plans, as for short-term goals, such as monetary mutual funds. MAPFRE offers a financial advisory service through MAPFRE Gestión Patrimonial, with experts who can help you find the options that best suit your objectives.

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