How we can all learn from the cost of Christmas past

Christmas spending: How to cut the price of a top family Christmas and start the New Year out of debt

With Christmas hot on our heels, we're all starting to feel the familiar worries over just how much Christmas is going to cost us this year.

Each year the amount we spend on Christmas seems to skyrocket, despite us tightening the purse strings in the downturn. In fact, a recent study found that shoppers expected to fork out over £600 on presents alone - with that figure appearing to rise each year. 

The cost of Christmas: We spend far more on the season than 50 years agoSo as we calculate the cost of the presents, the chocolates and all the food and drink we'll be enjoying, it's little wonder that many of us feel nostalgic for a time when Christmas was simpler - and seemingly, a lot cheaper.

[Related: How to cook the perfect Christmas dinner]

Ask anyone in their 50s about their childhood Christmases and you’ll hear about a less complicated celebration – fewer presents, no TV and playing board games as a family rather than fighting over the Wii remote.

Naturally everyone gets nostalgic for their own childhood Christmases, but the frenzied spending that exists today simply wasn't the norm in the 60s.

This is partly down to the level of disposable income we have today. But it’s also because it wasn’t as socially acceptable to get into debt 50 years ago; unlike today when so many people have a credit card.

Many families wind up starting the New Year with Christmas debtHow much did they have to spend?

Let’s take a look at Christmas 1962 – 50 years ago exactly.

Back in the 60s, the average UK home had a gross weekly income of £18, which is just over £300 today. In 2012, the average UK home has a gross weekly income of closer to £700.

[Related: How to clear your overdraft by Christmas]

That means we have almost twice the income of those back in 1962 – but how much more expensive is Christmas?
 
How much did everything cost?

The Office for National Statistics (ONS) can reveal that in the last 25 years, the cost of a Christmas tipple of whisky has risen from 68p to £2.26.

A Christmas ham cost 66p per kilogram back in 1967, compared to £7.13p per kilogram today.

And for those planning on cosying up around the fire, you'll be interested to know the cost of coal has risen dramatically in the last 50 years. Back in 1962, it was 48p per 50kg but today it's soared to a whopping £16.47.

More recently, high food inflation has pushed up the cost of Christmas dinner. The ONS found that Christmas dinner 2011 was 7.5 per cent more expensive than in 2010.

The price of turkey rose by 3.8 per cent to £8.15 a kg, with wine rising by more than 8 per cent.

The steepest rise was in the price of cream crackers, which soared by 50.9 per cent compared to the previous year.

This year there’s already been a warning on vegetables.

Prices of spouts, potatoes and other seasonally-festive veg are soaring higher than Rudolph – with even wholesale costs up 25 per cent compared to last year.

Debt the halls

Cutting the cost of Christmas doesn't have to mean a miserable Christmas doesn't have to meanFestive spending may go up and down year on year, but over the last half a century we’ve had more disposable income than ever before – and the cost of Christmas has rocketed accordingly.

However, so has the amount of debt we’re willing to go into to fund a dream family Christmas.

A study by Skipton revealed that if the average Brit spent £631.18 on presents for their families last year, then they carried an average debt of £466.38 into 2012 as a result.

This means more than half the cost of the presents was funded using debt.

Research by the charity Family Action found that for the very poorest UK families, the lowest price for an ‘acceptable’ Christmas was £182.

That equates to their entire disposable income for two and a half weeks, making it easy to see why so many households - rich and poor - end up in debt this time of year.

Clearly we have a lot to learn from Christmas 1962.

It may mean fewer presents and less tinsel, but surely the best Christmas is one we can afford.

Has the amount you spend on Christmas increased? Do you go into debt to pay for the big day? Share your thoughts with other readers in the comments below.

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