
Christmas is one of the most looked-forward-to holidays of the year for so many people. But it can also be one of the most expensive, causing people financial misery well into January and ruining what should be a special time.
The Bank of England states that we spend on average £740 more in December than in a typical month. Therefore, it’s essential to be prepared if you want to have any chance of being able to pay the bills the following month. Planning ahead is key!
Table of Contents
Make a list
Make a list of all of the people you would like to buy a gift for and then write down how much you can afford to spend on each person. Take this figure and divide it by the amount of time you have left before Christmas. This will give you the amount you need to save each month in order to have enough.
For example, if the total comes to £700 and you have 11 months left to save, simply divide 700 by 11. You would need to save £64 (or £15 per week) each month to give you the £700 you need for Christmas.
Once you have made this list, stick to it! Just as you would for your grocery shopping.
Set up a dedicated Christmas savings account
Next, you need to set up a sinking fund for this money. A sinking fund is just a separate account or a pot used specifically for saving for a particular item or event. I use Starling bank for my singing funds and I fully automate it so that I don’t have to remember to manually transfer the money each month. Just set it up and forget about it and then the money will be there ready and waiting for when you need it.
Buy wrapping paper, cards, and crackers in the sales

This little hack can save you a small fortune. Each year after Christmas, these items will go on sale in all of the major supermarkets and in many other retail shops too, such as M&S and John Lewis. I make a point of grabbing as much wrapping paper as I can and then I buy a few packets of cards and a couple of boxes of crackers when they are all on offer. One year, I managed to get 8 rolls of wrapping paper for 20p each. Just a few days prior, they were selling for £3 each!
Use browser extensions when shopping online
It is possible to save yourself a pretty penny when shopping online just by using certain browser extensions. My favourites are Kindred and Honey. Once they have been added to your browser (this is very easy to do), they will work away in the background trying to find you the best deal for whatever it is you’re looking for.
Spend less on Christmas dinner

Christmas just wouldn’t be Christmas without the traditional Christmas dinner and all the trimmings. But this can become quite costly, especially if you have a large family or you’re entertaining.
Don’t be duped into buying more food than you need. It’s very easy to get caught up in all of the Christmas hype but there’s nothing worse than spending a small fortune on food in the supermarket and then spending hours upon hours on Christmas day prepping and cooking only to find that, yet again, you’ve made far too much and it will never get eaten.
Plan out in advance what want to make on the day and ask yourself if it’s a realistic meal plan. Could you cut back? Do you really need three different choices of meat? Probably not. Then go one step further and swap branded products for own-brand ones. Chances are no one will know the difference.
After dinner comes dessert and this can also be quite costly. So why not make your own? You could get the whole family involved and make it a new family tradition. Lynn from Mrs Mummy Penny shows you how to make your own yummy chocolate Yule log over on her blog.
Secret Santa and whole family gifts
Instead of buying a gift for each of your work colleagues or each of your friends, why not consider doing a secret Santa?
Secret Santa involves putting everyone’s name into a hat and then each person pulling out a name. The name you pull out is the person you buy a gift for. You don’t buy for anyone else. So if your work group or friend group consists of twenty people, you only have to buy for one person but everyone gets a gift and no one is left out. It’s a fantastic way to save a huge amount of money without being seen as a scrooge.
If secret Santa isn’t your kind of thing, consider buying just one gift for a group of people. For example, if you usually buy a gift for your friend and more gifts for each of her children and something for her husband too, you could instead buy the whole family a luxury tin of biscuits.
Be delivery smart
When doing any Christmas shopping online, it pays to try to combine postage wherever possible. If you know you’re going to be buying a few items from the same shop wait until you can buy them all together so that you only have to pay for postage once, not multiple times. Better still, try to find stores that offer free postage. But be sure to check that they haven’t increased the cost of the items to compensate!
It might even be worthwhile signing up for Amazon Prime for the month of December just to benefit from the free delivery option. Amazon Prime costs £7.99 per month and can be canceled any time without notice.
Consider giving handmade gifts

Many people would love to receive a gift that you have taken the time to make yourself. There’s a wealth of ideas online, including hampers, baked gifts, keepsakes, handmade soaps and scrubs, and photo albums just to name a few. Skint Dad has a brilliant post on how to make your own gorgeous hamper on a budget, and Claire at Stapo’s Thrifty Life Hacks shows how to make little ‘pots of Gold’ to give as a unique and unusual gift.
Make use of cashback sites and apps
If you don’t make use of cashback apps you’re leaving a heap of money on the table. Cashback sites can be used all year round and you can even use them to save money on your household bills and insurance policies. When you use them, it’s essentially like getting a discount on the item or service you’ve purchased.
Topcashback and Quidco are the most well-known. I also love the loyalBe app, which allows you to earn cashback-style rewards for everyday spending.
Give an IOU
Giving an IOU is a great way to save a serious amount of money. Simply let everyone know that you will be giving out presents in January instead of on Christmas day. You will be able to do all of your Christmas shopping in the Boxing day and January sales and save yourself loads of cash.
If you don’t feel comfortable doing this with the family and friends you’re going to see before or on the big day, you can certainly do it for those you won’t be seeing until afterwards.
Buy perfume online
Let’s face it – who doesn’t love to receive a gorgeous bottle of perfume for Christmas? But we all know how expensive it can be. Even a small bottle can set you back £40.
However, there are now a whole host of specialist online websites where you can get a genuine bottle of branded perfume at a fraction of the cost. One of my favourites is allbeauty.
Track your spending
It is essential to track your Christmas spending so that you don’t go over budget. Just a couple of extra bits for the stocking or another gift that granny would absolutely love will cause your budget to skyrocket.
Be meticulous about this – track every single penny and you’ll know when you’ve hit your target amount and need to stop.
Give your time

Instead of buying gifts, why not offer your time instead? There is nothing more precious than the gift of time.
Does your sister struggle to get some time to herself? Offer to babysit so that she can go out and relax. Or maybe you have an elderly relative who struggles with certain chores. You could dedicate a few days or so to helping them get things done. This will probably be appreciated so much more than any gift you could buy.
Sell your stuff

Selling things you no longer need or use is a great way to raise some extra money for Christmas. Go around the house, room by room, and gather together everything that’s just adding to the clutter. List it on eBay or Facebook marketplace and then use the money to buy gifts. Vinted is great for selling clothes and Ziffit is a great site for selling unwanted books and CDs.
Increase your income
If you just love to buy extravagant gifts for people and can’t think of anything worse than having a frugal Christmas or a budgeted-for Christmas then increasing your income is an option. There are so many ways to make extra money online. I love matched betting and have made quite a decent amount of money from it. I also enjoy completing surveys from time to time. Check out Prolific for some really interesting and well-paid ones.
If online isn’t your thing you could apply to become an Uber driver or Amazon delivery driver. Or if you love dogs and are willing to get insurance you could do some dog walking or pet sitting.
Consider not giving gifts
If your financial situation is such that buying gifts will leave you struggling to pay your bills, then the sensible thing to do is to just not buy gifts.
Be honest with your friends and family. They would much rather this than receive a gift and see you struggling afterwards. And you never know, they may be struggling too and you opening up to them may give them the confidence to say they can’t afford it either.
Remember – it doesn’t have to be forever – just until you have yourself sorted. Christmas is about so much more than just gifts. It is about spending time with the people we love.
In summary
For most of us, Christmas is one of the most expensive times of the year so it’s essential to prepare for it. The earlier we start to prepare, the more time we have to save our pennies. It’s also important to remember that more money spent doesn’t equal a better Christmas. If you can’t afford gifts this year, show loved ones you care in other ways.
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