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The True Cost of Christmas

Vicky Parry 21st Dec 2023 No Comments

Reading Time: 3 minutes

Christmas is still a week away, and the average spend in the UK is already up nearly £200 from last year. Christmas is no longer just one day but a whole month. Christmas trees are starting to go up in November, and consumer needs around the holidays seem to increase every year. Whether it is Christmas Eve boxes, Christmas jumpers, or advent calendars (chocolate AND toy seems the norm now) – all of these things have got us all shelling out a fair old whack. We take a look at what exactly it is that encourages such a huge spend in December.

Analysis conducted by Finder.com suggested that statistically, “Brits are expected to spend an average of £602 each on Christmas gifts in 2023, an increase of 40% from an average spend of £429 in 2022.” But where on earth is Skint Britain finding this sort of money? Finder explains that “Almost 23 million Brits (43%) plan to use credit cards to cover their Christmas spending this year, with a total spend of over £14 billion on credit cards.”

So not only are we spending big, but we are also spending money that we don’t have. What is the psychology behind this?

Often, in times of hardship or worry, Christmas becomes an escapism we all lean on. What was once very much “for the kids” is now very much an adult necessity. We saw this very graphically in the distressing Christmases of the pandemic era. People needed that warm glow of magic and tinsel to get them through the desolate isolation periods. According to psychoanalyst Steve McKeown, founder of MindFixers and The McKeown Clinic “people who start putting up their Christmas decorations earlier could be happier and feel less stressed as a result. But why? Speaking to Unilad, McKeown explained that getting in the festive spirit with fairy lights and tinsel is very nostalgic and helps us reconnect to happy childhood memories.”

According to ExpressVPN, this spending uptick isn’t only Christmas. They say that “Holiday season spending isn’t just about the festive period. For retailers, the season continues as long as shoppers keep using their credit cards. The advent of the new year marks the beginning of a new wave of spending, with Lunar New Year and Valentine’s Day sales dominating January and February.”

What do People Spend Their Money On in the Holidays?

As revealed by ExpressVPN, over 60% of this budget is dedicated solely to buying gifts. 23% is suggested to be used on non-gift purchases like food and decorations. This sounds about right to us, with people in the MoneyMagpie office sharing their own spending this year. The only deviation from this was one team member going abroad this Christmas to see family. That meant that travel pipped their top spot. But the rest of us all averaged a gift spend of £492.

Research conducted by WorldRemit shows that in 2022, Canada and Germany spent more than their British and American counterparts during the Christmas season. This is expected to continue in 2023, with those in Canada and Germany spending more.

So this leads us to ask, is Christmas the biggest holiday for spending? In America, the Superbowl is renowned for an uptick in spending, and in Britain, both Easter and Valentine’s Day also see a surge in commercial spending. Neither, however, comes close to Christmas, the international king of the consumer holiday.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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