Christmas comes but once a year – but doesn’t it come round quickly? Many of us have a lot of people to buy for – and you might even need to factor in travel costs. Some of us want to make sure we can give to charity too. Not to mention Christmas parties, outfits, Christmas trees, decorations…the list goes on!
It can be easy to get stung with Christmas spending, and all too tempting to put it on your credit card or go deep into your overdraft.
Each year, you’re probably telling yourself “I’ll plan earlier next year!”.
To help you budget for next Christmas, we have put together five handy tips which could help to make the festive period that bit easier for you.
With the rise in the cost of living, monthly household spending in the UK is on the increase. However, in the run up to Christmas our spending habits change. We spend even more each month, and our budgets feel squeezed. Research from YouGov suggests that the average Brit spent £600 on Christmas in 2022, with a quarter (25%) saying they’re unable to have the celebration they’d like because they can’t afford it.
But with a little planning earlier in the year, your festive spending can become more manageable.
1. Work out what you can afford to save each month and set up a standing order
It’s important to have a financial plan in place before the festive period arrives. It’s easy to go over budget when you don’t know how much to spend on each present.
Start by listing your monthly income and expenditure – rent/mortgage, bills, transport. Your essentials, like insurance, debt, childcare and your monthly entertainment budget. This will tell you how much spare cash you could save each month.
Then, make a list of every person you need to buy a gift for, set a budget of how much you want to spend on each person and add it all up.
Divide the amount up between the months until December to see how much you’ll need to save. You might need to adjust your Christmas budget depending on how much you’re able to afford.
Then you could set up a standing order to go into a regular savings account, for example. That can then become your Christmas savings pot.
Remember, the sooner you start saving for the next Christmas, the less you’ll have to save each month. You could even include your Christmas food and travelling costs in your budget, too.
Here are some indicative sums showing what 11 months of regular savings could mean for your next Christmas spending pot. And don’t forget, there will be interest from your savings account to be added to the pot, too.
| Monthly amount saved 1 January – 1 November | Christmas pot (not including interest) |
| £50 | £550 |
| £75 | £825 |
| £100 | £1,100 |
| £125 | £1,375 |
| £150 | £1,650 |
2. Set a limit on how many presents you buy – the 5-gift rule for children.
It can be easy to get carried away and go overboard buying Christmas gifts. The 5-gift rule is a savvy approach to buying for children over the festive period. In the 5-gift rule, the first four gifts are easy.
You can purchase something they want, something they need, something to wear and something to read. Then, the fifth gift is something they didn’t even know they wanted! This is a fantastic way to have fun and be budget-friendly at the same time.
3. Secret Santa
A Secret Santa between the whole family (or, at least the grown-ups!) can be a great way of reducing costs whilst still retaining the fun of everyone opening their presents. You can set a price limit to stay within budget, and create a list of preferred gifts for everyone. So, you’re guaranteed to make use of your brilliant new prezzie!
4. Grab bargains throughout the year
Squeezing ALL of your presents out of one December payslip is always going to be tough. So, why not use the whole year and take advantage of lower prices when they crop up?
If you have a list of present ideas for everyone in January, all you need to do is wait and grab them whenever the price drops. You’ve reduced the cost, made it more manageable, AND made December a lot more relaxing!
5. Consider pre-loved gifts
Quite often, a pre-loved gift can be just as good quality as something brand new – but with less cost! There are plenty of online retailers and apps specialising in pre-loved goods. And, of course, a visit to your local charity shop will spread some Christmas spirit further afield, and into your local community.
We hope you’ve found our Christmas saving and budgeting tips useful. If you want to start saving regularly with us, here are our regular savings accounts.
