How to save money for Christmas

The festive season may seem a long way off but planning ahead now can give you a more affordable Christmas. If you can get ahead of the game you may not have to rely as much on credit cards and your overdraft to meet your yuletide spend. 

The Bank of England estimates that a typical UK household spends £500 extra in December, plus with the introduction of Black Friday and Cyber Monday, spending in November has shot up in recent years too. 

More worryingly, stats from an article by The Independent show the average person takes four months to pay off their festive debts from the 'combined cost of presents, food, drink and travel' - this means that a 'typical adult will need 14 weeks to pay off credit cards'. As a result of spending at Christmas, 40% believe January will be the most difficult month of the year financially. We believe a little preparation can lead to a less expensive Christmas and a more comfortable new year. After all, Christmas comes at the same time each year so it shouldn't be a shock that we're going to spend money. 

How to save for Christmas

Here are our top tips and tricks for getting ahead, months before the festive season kicks in. 

1. Set a budget and know how much you need to save

Every family is different. Some may have plenty of parties, buffets and hordes of people to buy for whereas others may be smaller and keep celebrations to just a few days over the festive period. Think back to last year to get an idea of occasions, food and gifts and consider where you could potentially cut back on your shopping list. Once you have a budget and a number to work towards you'll be able to split this up in order to know how much you'll need to cut back or save. 
  • Do you really need three wheels of cheese for your Boxing Day buffet? If you were eating brie and bacon toasties until Valentine's Day last time, probably not. 
  • Re-use decorations from last year and you'll save a chunk from your spending allowance. 
  • Remove outfits from your budget - these aren't essential for the family and we have some tips for festive fashion coming up. 
  • Talk to family and friends and discuss bringing gifts down a notch this year. Set a gift budget so you know how much you'll spend or organise Secret Santa amongst different friend groups - everyone will only buy and receive one gift and you'll all save a packet. 
  • Alternatively, agree not to buy gifts for certain people!
  • Warn people you won't be sending Christmas cards this year and grab their email address instead. Write a family newsletter round up and pop it around to friends and family that you'd usually send a card to. You'll save around 70p on each first class stamp which means if you'd usually send around 30 Christmas cards you'll save £21.

2. Start saving!

Start saving for Christmas as soon as you can. Make regular weekly or monthly deposits and set up a Direct Debit for when you get paid to make sure your Christmas savings are safe before you start to spend! Remember to deposit the cash somewhere you can’t be tempted to spend it, for example, a savings account and you'll even earn a bit of interest on top. 

Check out our #SavingSwaps for ideas on how much you could save from cutting down on regular spends like car washes, coffees and meal deals. For example, if you spend £2 a day on a flat white every day during a working week and you cut this out at the beginning of September you'll have 13 weeks worth of saving. That's £130 in the Christmas pot by the beginning of December! 


3. Sell, swap and boost your budget!

Christmas time always comes with 'stuff'. You'll more than likely accumulate more items during December and preparing for Christmas is a great time for a clear out. You'll make some extra cash to boost your budget too! 

  • Read our four steps to an organised home guide and sell or swap any items that you no longer need. 
  • When it comes to new outfits, check out websites such as eBay and Depop for bargain party outfits and, as above, you could even sell some of your old pieces that you don't want to wear this year. 
  • Make cashback on your online purchases by using cashback sites for your purchases. If you start this early, your cashback could come in for December and some of your Christmas shopping could end up being free! Shop for Christmas presents via cashback sites too and reap the rewards in the new year. 

4. Make a list, and check it twice

When it comes to buying your gifts, know what you'd like to buy people by around mid-November and follow these tips. 

  • Take advantage of Black Friday and Cyber Monday sales if the items are on your list.
  • Avoid buying extra gifts that could mean the inevitable 'even out' shop to make sure everyone has the same amount of gifts! 
  • Do your shopping online if you often get tempted by shiny displays and offers to avoid getting side tracked into over-spending. Plus, you can often receive freebies like samples and free gift wrapping with some online retailers. 
  • Don't buy from the first place you see something, shop around to see where you can save. 
  • Use 3-for-2 deals and other retailer offers.  But, again only buy into them if they're gifts that are actually on your list. 
  • Once you've actually bought your tin of Quality Street or barrel of biscuits, hide them away and don't be tempted to dip into it because you'll only have to re-buy them and this isn't cost saving!
  • Try making some gifts this year such as cookies or cakes - many people prefer an edible gift so they aren't plagued with clutter!
  • Re-gift items that you haven't opened or used. We're talking the bottle of wine you won at a raffle and you won't drink - this kind of thing.
  • Cash in loyalty points from your regular supermarket or high street shops and use them for gifts. 

There we have four different areas that could impact your spending - what do you think you'll save the most on this year? Let us know your Christmas savings tips over on Twitter or Facebook

Christmas Shoppig

Last updated on:

Sign up to our newsletter

We regularly send out newsletters with product information, advice on improving your finances and top tips. If you would like to receive this please sign up to our newsletter, which you can unsubscribe from at any point.