The money-saving expert cautions on BBC Radio 5 Live that buying presents for everyone this Christmas could be doing more harm than good.
Written 20th September 2024 | Subscribe to our Christmas newsletter
As Christmas approaches, Martin Lewis has shared an important message for families. Speaking on BBC Radio 5 Live, Martin discussed common financial pitfalls many people fall into during the holiday season.
He also addressed how purchasing gifts for others can sometimes cause more harm than good, explaining just how much the average family spends over the festive period.
Even those who are usually careful with their savings can find themselves making these same mistakes. A central theme of his advice was that people often set their expectations too high for the perfect Christmas, leading them to overspend.
He explained: “This is all about your worst financial mistakes…one of the big mistakes many people make at Christmas is they, in their mind, come up with a lust list - what is the perfect Christmas. And if you come up with a lust list, for most people, that will either lead to one of two things: debt or disappointment because you won’t get it."
“Now, forgive me for being all bah humbug about this but Christmas is a huge proportion of the year’s annual expenditure, the average person spends £800 on it, the average family... 800 quid a year."
"It's getting up there with a family holiday. Most people can’t afford that out of December’s income."
Martin emphasized the importance of planning ahead, saying: "You need to do some pre-planning and if I may just take a bit of an advantage for the moment to say this is a public service announcement to everybody…Christmas this year will be on the 25th of December, note that down it’s not unexpected…but when I come into January, January is the biggest time for all the debt counselling agencies and when you talk to people about why they’ve gone then, they say Christmas of course."
“But Christmas is not unexpected which is why we’re doing it now because you need to plan for it now…”
To avoid financial stress, Martin advises setting a clear budget based on what you can realistically afford, and then building your Christmas plans around that figure. He stressed the importance of sticking to that budget, reminding everyone that Christmas is just one day and “not worth the financial hangover”.
He also touched on the “social phobia” of achieving a perfect Christmas, warning that the holiday should not be about draining your finances. He pointed out that in some cases, giving a gift “can be selfish,” as it may pressure others who cannot afford to buy gifts to feel obligated to reciprocate.
