Christmas is expensive. Hardly a ground breaking observation, but it’s true. Normally, I keep a strict budget. I know exactly how much money comes in and out each month. Christmas is a bit different.

I enjoy treating my friends and family. Currently I’m very lucky and have a bit of spare income each month so I can afford not to worry about price tags. But, I want to be a bit more aware of my spending this Christmas so I can put more into my savings and investments.

So, this year I have set myself a challenge. I’m going to try and pay for Christmas this year entirely out of money I earn freelancing in December.

Can I do it? Keep reading to see if it might be possible…

1. The costs of Christmas
2. How much I can earn freelancing
3. Freelancing expenses
4. Can I pay for Christmas through freelancing?

The costs of Christmas

The aim of this challenge is to cover all the costs of Christmas. Not just present buying, but all the costs of Christmas.

These include:

• Gift buying
• Christmas cards (and postage costs)
• Food shopping
• Socialising

I already have decorations, so don’t need to buy anymore. I also don’t have any travel expenses to factor in.

This year, socialising costs might be down. Covid-19 has not disappeared and the threat of Omicron feels very real. I do still plan on catching up with some friends, but will likely spend less than I would in ordinary times.

I don’t have to cater the full Christmas dinner – no one messes with my mum’s cooking! All I have to worry about is dessert and a few other bits and pieces I will pick up. This helps keep my personal costs down, but I’ll be getting mum an extra nice present to say thank you!

It’s hard to put an exact number on all these costs. Gift buying might be around £500, plus another £30 for Christmas cards. Food shopping and socialising might come to another £150.

This gives a total of £680 – although it is a very rough estimate. Time will tell how much I end up spending (hopefully not much more than this though!)

How much can I earn freelancing?

This is the key question.

Obviously, this will have to be retrospective. Any money I earn this month will be invoiced and (hopefully!) paid at the beginning of next month.

The amount I earn each month varies. This tax year I’ve earnt £540 each month on average. However, I had some very sparse months at the start of the year in between projects. In recent months, I’ve been earning above this. Last month I invoiced just shy of £1000.

If I invoice this sum again, I should comfortably be able to pay for Christmas using freelance income.

Earning that much did take a significant amount of work and was time consuming.

Will I be able to commit to this volume of work this month? It may be tricky. Christmas is not about money. It’s far more important to be present and grateful and spend time with friends and family.

I’m in a fortunate position, I don’t have to work myself to the bone to make ends meet and can sacrifice a bit of income this month. This means I can – and will – take a proper break and enjoy the festive period.

Freelancing expenses

Sadly, it’s not quite as simple as earn £100, have £100 to spend.

There’s tax to pay. I’m a basic rate taxpayer, so I pay 20% of what I earn as tax. This means straight away I don’t keep £20 of every £100 I earn freelancing.

There’s also student loan repayments and National Insurance Contributions.

These are harder to calculate up front. At the time of writing, those with Plan 2 student loans, pay 9% on anything they earn over £2,400 (gross) in a month. Naturally, as the amount I earn each month fluctuates, so does the amount of my student loan I pay back.

There are also hidden freelancing costs. My work doesn’t require materials, but I do use electricity, the internet and my phone. These are harder to calculate, so for the purpose of this experiment, I will set them at £15 for the month.

Can I pay for Christmas through freelancing?

So, can I do it?

I think I can. But, time will tell.

It will be a challenge and I’ll have to keep my spending in check. I am far too susceptible to a Christmas shopping spree…

There’s a lot of factors involved, however. Freelance work is – by its very nature – unpredictable.

It also depends on how much time I decide to spend working. I am lucky enough to have some very flexible arrangements and can choose how much work I take on for some clients.

I will be keeping track of my progress on Twitter and Instagram. I will also do a follow up post in January to let you know how I got on.

Make your predictions below!

Don’t forget to follow me on social media @Katie20Percent to keep up to date with all my latest posts.

If you enjoyed this post on my attempt to cover my Christmas costs by freelancing, update, please like and share it with your friends and/or on social media. Do you think I can do it? How much are you hoping to spend this Christmas? Comment below. I’d love to hear your thoughts!