How Much Should I Save for Christmas?

For many of us, the weeks leading up to Christmas are some of the most expensive of the year. The festive preparations can pile extra pressure on our finances and the colder, shorter days can push up energy costs. Nick Hill, a money expert at the Money and Pensions Service outlines some measures you can take to make it a little easier.

This year particularly will be different for many of us, and some may be feeling the squeeze for the first time this year due to the rising cost of living. If you’re worried about the expense that often comes with the festive celebrations and starting the New Year with Christmas debt, making a plan as early as possible for how you’ll pay for Christmas will help take some of the pressure off.  Start saving early to spread the cost The best thing you can do to ease the financial pressure of Christmas is to plan ahead. It’s difficult to pay for Christmas out of single month’s income alone, so look at how you can divert some income from the months before and after to help. Setting a budget can help you avoid spending more than you can manage and will give you a clear picture of what costs you need to cover.  Work out what you can afford Last year, YouGov’s annual Christmas spending tracker revealed that the average person expected to spend £1,108 during the festive season – which included presents and gifts, food and drink, travel, among other expenses. You should work out what you can afford first before you start planning.  Make a list – and check it twice Pressure to please loved ones and to give children the perfect Christmas tops the list of reasons people overspend during the festive season.

A good way to tackle this is make a list of family and friends you will be buying presents for and allocate an amount for each person. Christmas shopping on impulse is dangerous so make a list and stick to it.  Discounts and cashback Discounts and cashback are a good way to make savings. Always shop around to see if you can find a better deal as some websites may offer discount in the leader up to Christmas.

Cashback is offered as an enticement to make you spend, and possibly on things you might not have bought in the first place. But if you’re planning on buying something anyway, it can be a good way to make savings.

Cashback websites act as the middle man between you and online retailers, and in return they give you a cut of the commission. If you follow the instructions on the site carefully you should be able to quickly build up a reasonable amount. The top two are Quidco and

Our delicious range of meals, finger foods and snacks offer a wide variety of natural tastes and textures for babies, toddlers and bigger kids too.

Topcashback, though it’s worth shopping around to find the best deals.

Although discounts and cashback may be enticing, try not to see this as a reason to spend more than you usually would and stick to what you can afford.  Borrowing for Christmas It might seem easy now to pay for presents on your credit card or even take out a short-term loan but borrowing money to cover your Christmas spend could come at a price in interest and fees.

At best, that could be money used for something far more worthwhile. At worst, it could leave you with debt you might struggle to pay off.

Paying back the debt could be expensive and if you miss payments there’ll be a negative impact on your credit report. It could affect your future ability to get any type of credit so you should consider whether you need to borrow the money at all.  Grab end-of-Christmas bargains It may seem far too early to start thinking about next Christmas, but you can make savings by picking up next years Christmas cards, gift wrap and decorations in the Boxing Day and January sales.  Give the gift of savings to the young people in your life

Rather than giving gifts, consider putting the money you intended to spend on Christmas presents into a savings account for your own children or young relatives instead. It not only starts their adult lives with some savings, but also gets them involved early in helping them learn important lessons about money. You can find some useful guidance about how to save for children on the MoneyHelper website at www.moneyhelper.org.uk/en/savings/

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Talk to your friends and family Many people will be struggling this Christmas, so if you’re spending too much on presents for loved ones, they might feel the pressure to spend the same amount on you, even if they can’t afford to.

You could mutually agree to not give unnecessary presents to friends or family, organise a Secret Santa instead of buying gifts for everyone, or instead agree a cap on spending to something that is more manageable for everyone.

Money worries are part of everyday life and something that everyone experiences, especially at this time of year. Whether you reach out to a family member, friend or a money guidance professional, talking about money is a positive way to ease the burden.  Debt worries over Christmas? Get help The pandemic and rising cost of living has put extra strain on the finances of many people this year. If you’re worried about this – know you are not alone. There are a number of resources on the MoneyHelper website to help people, from what to do if you’re worried about energy bills rising to help if you’re struggling with your bills.

MoneySavingExpert also has a long list of tips to help you make some savings this Christmas at

www.moneysavingexpert.com/shopping/ christmas-savings

If you’re struggling with money, you can talk to a specialist today, online or by phone, who will be able to help you start sorting out your financial problems. Visit moneyhelper.org.uk or call 0800 138 7777 for free, confidential and impartial guidance.