FT News Briefing: How to spend wisely this holiday season with Claer Barrett

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1:04Hi, folks. I'm Mark Filippino, host of the FT News Briefing podcast. We asked listeners about how their spending habits might have changed this holiday season, given the economy. And then we did this great interview with Claire, where we talked about those listeners' stories and how you can make the pinch hurt a little less this holiday season. Anyway, it was a really insightful conversation, and we thought Money Clinic listeners would enjoy it. So here you go.

1:36The holiday season is the most wonderful time of the year, but it's also the most expensive. Between gifts, food, and travel, people can end up spending a lot of money. This year, economic conditions are tough for lots of folks. So how are people reacting to high prices, and what can you do to reduce excess spending? To find out, I'm here with Claire Barrett, the FT's consumer editor. You may have seen her on the FT's TikTok and Instagram. Claire, welcome to the show. Oh, thanks for having me, Mark. It's great to be on. It's a real pleasure. So, Claire, a bunch of listeners sent us messages about their holiday spending habits.

2:10I'd like to ask you what you think of them and maybe ask you a couple of questions. How's that sound? Oh, I'm so ready for this. Let's do it. All right. Here's the first one. Hi, Mark. This is Jason from London. This year, we've decided to do Secret Santa as a family in order to save money and be more environmentally conscious. That way, we only buy one gift each and each person receives one gift. We set the limit to£75. We're fortunate not having to cut back too much, but it is one way of saving a bit of money while also getting something nice. We're also going to take turns cooking in the Airbnb to save a bit of money.

2:50But again, nothing too dramatic compared to other years, just a little bit more frugal. So first off, Claire, can you take a step back and paint a picture of what's going on in the broader economy that could be contributing to people pulling back? It's a combination of higher costs and also worrying about the future, both the health of the economy and the jobs market next year, and in particular, if AI could be coming for your job. Unemployment is rising on both sides of the world, And it's been particularly hard on younger people. They're more likely to be out of work. But also, wage growth is slowing as well.

3:27And when you combine that with the continued squeeze from higher inflation, those big price rises that we saw in the wake of the pandemic and the energy crisis, the Ukraine war, those price rises have become embedded. So it sounds like Jason's on to something, you know, making stuff at home. As you said, inflation is higher. So cutting back on the number of gifts that his family is spending on, just figuring out ways to cut corners so that you can enjoy the holiday in full, but maybe a little differently. Well, exactly. I mean, I think if you challenge somebody to say, tell me like one or even two Christmas gifts that you received last year, could you remember?

4:09No, definitely not. It's something that we spend so much time on, as well as money, getting all of these things organized, ticking off the list, making sure everyone's got a present. But ultimately, it's time that we spend with one another. That's the feeling and the sentiment that we really, really remember and hold with us year after year. So I think things like Secret Santa are brilliant. It's a great idea. The only catch is it does require buy-in from everyone for it to work and also organization. For sure. So Jason's onto something, focus on quality, not quantity. I want to play this next clip from Kira from New Zealand.

4:47She takes a different approach to spending during the holidays. Hi, Mark. I'm Kira, 27, working in banking in New Zealand. The economy has definitely shaped the way I'm approaching the holidays. I've powered back on impulse spending and focused instead on experiences and investments that hold value. So rather than buying more gifts, I put aside a set of portion of my income to grow over the long term and I'm prioritizing travel and education that expand my opportunities, not just my wardrobe or my decor. So for me, the season is less about consumption and more about positioning, building financial discipline now so that I have the optionality later.

5:27So Claire, this is a really interesting one in the sense that she's not necessarily buying for others, but she is focusing on investments, which is right up our alley as the FT, but also experiences that aren't necessarily gifts in the traditional form. No, I mean, very sensible. Kira, it's a pleasure to have you as a listener and a reader of the FT. And I wish more people were like you. Firstly, experiences over stuff. I think that's definitely the right thing to value. Your presence is more important than presence, as we've just said. But last year, me and my two best female friends, we decided to buy each other a theatre ticket.

6:11And we went out to a show because it's a treat for us to spend time together, do something that we wouldn't normally do. We would rather concentrate on experiences and spending time with one another. And it's just so much harder for younger people nowadays to achieve their financial goals. So the fact that Kira is 27 and she is able to find even a little bit of money to set aside every month to invest for the long term, compound away, you know, that's absolutely fantastic and much better to be doing that than to have, you know, a fuller wardrobe and drawers full of plastic junk. And she does make that point in a part of the tape that I didn't play.

6:50She says that her generation has it harder than her parents. Do you think that younger people are conscious of the challenges they face in terms of saving and living costs? Oh, absolutely. I mean, housing is the big one, I think, both in the US and the UK. Possibly one of the most depressing FT stories I've read so far this year is that the number of rental properties in the UK, especially in London, that don't have a living room, that don't have a lounge anymore, because landlords are just turning them into an extra bedroom to squeeze more money out of the rental yields. And it's so much harder for younger people to save up to buy a house as renting is so expensive.

7:31And the magic ingredient, of course, is BOMAD, the bank of mum and dad. If you're lucky enough to have wealthy parents, you know, who can gift you all or part of a housing deposit. I mean, that's really something that is taking off in the UK even more now that pensions are going to be subject to inheritance tax from 2027 onwards. But the big theme that I see in FT reader comments under articles from younger readers that really bothers me is just this feeling of despair. Like, I'm just not going to be able to achieve life goals. I'm not going to be able to get on the housing ladder. I'm not going to be able to start a family.

8:04And as a result, more and more young people seem to be wanting to seek career opportunities outside of the UK, which is depressing, but sadly, it seems to be the reality. Okay, so lastly, I want to talk about charity, a completely different way of spending your money this holiday. Hi, I'm John Green, chairman of Catholics in Fundraising. Thoughts for the Christmas season, considering high household costs in areas like food and energy, and also a bigger picture of increasing unemployment. My thoughts for the Christmas season, avoid debt and maintain rainy day savings, but also consider society is poor, who will be feeling the pinch more than most with a seasonal charitable donation.

8:49So, Claire, John hits on a lot of the topics that we've talked about already, but also encourages people to donate to charities. Does an affordability pinch tend to reduce people's willingness to give to charity, though, considering how tight things are out there? Well, sadly, yes. only half of people in the uk give to charity according to the charities association but before the pandemic it was nearly 60 so we've seen this reduction in generosity you could say but the cost of living crisis means that people are relying on charities more than ever especially charities like food banks and also energy banks that provide people with power when they haven't got enough to literally keep the lights on.

9:36Health-related charities, they're still the ones that are receiving the lion's share of donations. Charities like Hospices and Cancer Research, they're right up there with the people giving generously. And I think certainly when I think of the charities that I've given to this year, I've supported our local hospice. One of my friends is sadly dying in a hospice at the moment, but they are absolutely amazing places. they're not part of the NHS. They are generally all privately funded and run by charities. It's obviously a big shock for people when they find that out. But also a bit closer to home, the FT's own charity, Our Seasonal Appeal for Flick, the Financial Literacy and Inclusion campaign, is currently live.

10:16We are funding giving the gift of financial education. At Christmas time, Experian is match funding all donations. So if you are feeling generous, your money can go even further. Claire, after hearing from some of our listeners, what's your takeaway on how people are or should be approaching personal finance this holiday season? Okay, well, my big takeaway is instead of setting a financial resolution for the year ahead, think about setting what I would call a financial intention. So this is a bit softer than having a hard goal. It could be saying, in the year ahead, I just want to be more aware of what I'm spending, or perhaps I want to learn more about investing.

11:00And the idea behind this, Mark, is that if you're holding that intention in your mind, it should encourage consistent small actions towards that goal with no fixed time frame. So there's less pressure. You're less likely to just fail and give up. So I will leave you with that. Excellent. Claire Barrett is the FT's consumer editor. She regularly makes personal finance themed content for the FT's TikTok and Instagram accounts. And you can follow her at Claire, C-L-A-E-R-B. Thanks, Claire. Thanks very much for having me, Mark. And happy Christmas. Yeah. Happy Christmas to you too. Happy holidays.

11:35I also want to thank Jason, Kira, and John for their submissions, as well as everybody else who wrote and sent voice memos in. Thank you so much for your time. And of course, we'll provide links to Flick in the show notes.

12:19We'll be right back. and shifting investor expectations to AI-driven demand and the rise of private credit. When headlines can tilt markets overnight, how can companies stay on course? Strategic Alternatives, the RBC Capital Markets podcast, explores how corporates and investors are navigating new pathways to raise capital, create value, and drive growth. When conditions change, alternatives matter. Listen to Strategic Alternatives, available wherever you get your podcasts.