How to enjoy Christmas during the cost of living crisis - Sarah Coles

We have a far too many ridiculous traditions including mince pie consumption from October, a festive film marathon lasting all through December, and a solid week of panto in the run-up to the big day.

But most important of all is the fact that nobody is allowed to mention Christmas until this weekend. Of course, by then I’ll have been planning and saving for months: I just have to keep it quiet.

This year it has been far more difficult than usual to squirrel something away each month, but it’s the only way for us to avoid being overwhelmed by the cost of Christmas.

If we want to buy the same things as usual, it’s is going to be far more expensive this year – everything is about 10 per cent more expensive on average, but food is up closer to 15 per cent – so planning ahead is essential.

Families with more self-control than mine will tend to spread the cost by adding festive bits and pieces to the weekly shop. It means faint alarm bells started ringing when Kantar said this week that a third fewer shoppers were stocking up for Christmas than a year earlier.

Then our research into the cost of Christmas was published, and what looked like a worrying indication of affordability has emerged as a money-saving tactic.

We looked at how people are planning to cut festive expenses this year and found that two thirds of us will cut back on food and drink – and almost a quarter will do for the first time this year.

The supermarket shop is getting more attention than usual, with more of us trading down to budget brands – only just over a quarter will be sticking with the posh stuff, and a fifth will trade down for the first time this Christmas.

Increasingly people aren’t stopping with supermarket-own brands either, because while sales of own brands were up 10 per cent in October, it was the discount brands with the huge rise of 42 per cent.

We’re also embracing the discount supermarkets – with four fifths of us doing at least part of the festive shop there and one in seven doing so for the first time.

The growth of the discounters has been phenomenal. Aldi and Lidl have both seen sales increase by more than a fifth in a year, and now hold more than 16 per cent of the share of supermarket spending. This compares to just over 4 per cent during the 2008 financial crisis.

We’re also slashing the cost of presents. The most common approach is to shop around for bargains, and five out of six of us are prepared to take the extra time to find a good deal.

We’re also seasoned experts at timing our shopping to take advantage of sales and discounts, with three quarters of us finding bargains this way. We’re prepared to take bigger steps than usual this year too - like buying for fewer people or spending less on each one – around a quarter are planning to do each for the first time this year.

Overall, two in five of us are hoping to spend less this year than we did last time – and among women and the squeezed middle (aged 35-54) this rises to half.

Unfortunately, there’s no getting away from the fact that it’s still going to be incredibly expensive.

On average, those who celebrate the day will spend £576, with almost one in three parting with over £500 and one in eight spending over £1,000. It’s going to cost men even more - at an average of £622.

It means it’s worth considering whether there’s anything else we can do to bring our costs down – that previously may have been off the table.

Our survey showed that the steps we’re less likely to ever have taken were to have fewer people over for the day itself (two in five said they’d never considered it), to socialise less (a third ruled it out) and regifting unwanted presents (half of us claimed never to have done this).

If cutting the guest list for Christmas would cause needless festive arguments, you could ask friends and family to bring something with them on the day. It doesn’t have to be an enormous ask, they might be able to fork out for the Christmas pudding or a few crackers, but when you have a lot of visitors, spreading the load even a little can help.

It’s understandable that people may be keen to continue socialising – after-all we’ve had our fill of lockdown Christmases. However, there may be ways to do it that don’t break the bank. So you might swap a festive lunch with friends for a walk together, or a night in the pub for drinks at home. It’s the sort of thing you’d do without questioning it at any other time of the year, but it’s easy to fall into festive traditions and splash out without really thinking about it.

Re-gifting, meanwhile, is one of the easiest ways to cut costs. The most organised regifters will store unwanted presents all year in order to hand them out in a slightly different order. If you do this, don’t forget to make a note of who gave you what – I’m pretty sure my aunt and I have been swapping the same bottle of perfume for years.

Some people will specifically arrange to see some friends in the wasteland between Christmas and New Year, so they have fresh stocks of things to regift. And while most of us will try to pass it off as new, you could even make it a new money-saving tradition, with groups of friends who always get a regift. It’s up to you whether to make it one of the nicer things you received or use it as a chance to rid yourself of unpleasantly scented talc and itchy mittens.

Given how much we love a Christmas tradition in our household, it won’t come as any surprise that we’ve turned regifting from a last resort to something we look forward to, and it’s worth considering whether there’s room for more frugal traditions at your house too.

Housing market stalls

Even naturally optimistic estate agents are starting to think that the writing is on the wall for house prices. The Royal Institution of Chartered Surveyors has issued its residential market report for October, showing that house price growth stalled in October – after rising for 28 months in a row.

Chaos in the mortgage market in the aftermath of the mini budget was devastating for buyer confidence, and the looming recession is likely to take an even bigger toll. In the south east, agents are already reporting that prices are on their way down, and while it’s a very different market to Yorkshire, in the past it has been a lead indicator of change on the way elsewhere. It’s one reason why property specialists are resigned to a country-wide market correction in the coming year.

For anyone who decides to rent for a while – and wait to see what market has in store - there’s more bad news. October saw yet another month of rising tenant numbers and disappearing landlords, so rents are still climbing.

Sara Coles is a Senior Personal Finance Analyst and Podcast Host for Switch Your Money On Hargreaves Lansdown