How to save money for Christmas

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By Beehive Money


Did you know that in 2019 the Bank of England reckoned most UK households spent an extra £500 in December? Now that Black Friday’s become a permanent fixture in the UK calendar, we’re spending more than ever over the winter period in general. It’s no wonder that in 2018 The Independent shared some worrying figures about Christmas:

  • The average person needs four months to pay off festive debts.
  • A typical adult takes 14 weeks to repay their credit card.
  • 40% believe January is the hardest month financially.

Don’t worry – we’re here to help, and make festive saving simple. In our opinion, it pays to be prepared, and you can never start too soon! In fact, getting yourself sorted months ahead can make all the difference to your bank balance. Here are a few ideas on doing just that.

1. Set a budget

Start by separating the Christmas essentials from the extras. Roughly work out the cost of each, and be honest about what you could do without. When you’ve come to your final figure, divide it between the months left before Christmas, and you’ll know exactly how much to save. If you’re struggling to work out what to keep and what to cut, it can help to think of the below.

  • Food and entertaining: Do you prefer a few intimate get-togethers with different friends and family, or one big, blow-out buffet? If there’s normally food left over, perhaps you can budget a bit less for next time.
  • Decorations: Are there any you can reuse from previous years? Or, maybe you could have a go at crafting a few yourself? As for finding cheap decorations, you could browse car boot sales and charity shops during the festive season.
  • Gifts: Depending on when you start saving, you could snap up a bargain in the sales. If you’ve overspent heavily on presents before, try being open with friends and family about your budget, or organise a Secret Santa or Gift Grab instead (bonus – you’ll only need to buy one gift). You might even find a few people are relieved not to be swapping presents this time around! Alternatively, you could re-gift something you’ve received before, or even make your presents this year – think a knitted scarf or some homemade fudge.
  • Outfits: From Christmas Jumper Day to the office party, to his ‘n’ hers outfits on Christmas Day, themed yuletide clothing is showing no signs of going anywhere. If skipping the tradition isn’t an option, you could reuse last year’s outfit or look for something secondhand.
  • Cards: At Christmas, it’s not just buying cards that’s expensive. Sending them adds up, too – 30 first-class stamps at 85p each costs a whopping £25.50. And, let’s be honest, we don’t always keep the cards in the end, anyway – so send a family email or an ecard instead.

Unwrapping presents

2. Start saving!

It’s never too early to save. Here are a few tips for saving the savvy way.

  • Set up a standing order to move money into a savings account on payday, so you’re less tempted to spend spare cash.
  • Set up a tax-free ISA (Individual Savings Account), to make your money go further. Just make sure it’s one you’ll be able to access in time to start your festive spending.
  • Pop spare change in a jar, and do the same with your online bank balance – just round down and move the pennies into your savings pot.
  • Check out our visual saving guide to keep a record of what you’re putting away each month.
  • Try a no-spend day – the more you can manage in a month, the better!
  • Cut down on everyday luxuries, like expensive coffees (when you know you have perfectly good instant at home!).
  • It might sound a bit early, or like you’ve got a long way to go, but starting to save as far back as July can make such a difference to the Christmas budget. Squirrel away just £10 a week, and you’ll have £220 by the first week of December. Save £100 a month, and you’ll more than double this. We’ve even got tips for saving on Christmas dinner.

3. Make a list, and check it twice

Christmas gifting doesn’t have to be a grind. In fact, there are ways to make all that festive spending feel a bit less daunting. Here are four dos and don’ts to keep in mind.

  • Do shop Black Friday and Cyber Monday sales – but regularly price-watch, as some sneaky retailers actually increase prices beforehand, to make deals seem like better value.
  • Don’t fall into the trap of spending the same amount on the children or giving them the same number of gifts. Thinking about what they’d really like means you could cut down on spending, and there’s no shame in shared gifts, either.
  • Don’t be tempted by sparkly displays, which can trigger overspending. Online shopping can make it a little easier to budget, and you might also get free samples or gift wrap added into the mix (not to mention, you’ll avoid town at its busiest). Always shop around, too – the first price you see may not be the best.
  • Do look into deals. Some retailers offer 3-for-2s around Christmas, while others let you cash in loyalty points for gifts or experiences. You may even be able to get cashback on some online spending, which you can swap for gift cards, or put towards purchases.

If you’re still feeling a bit clueless about saving for Christmas, don’t worry – our blog has tons of savings guides that cover everything from the savings accounts on offer, to tips on saving quickly and making your Christmas dinner budget stretch that bit further.

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