8 easy ways to budget for Christmas

4 min Read Published: 29 Sep 2023

how to budget for christmas

Saving up to buy Christmas gifts for friends and family every year can get very expensive, especially if you always find yourself spending more than you planned to. There's Christmas dinner, presents, cards, stocking fillers, and secret Santa to think about, so putting aside enough money to see you through all the expenses is crucial if you want to avoid starting off the New Year in debt.

In this article, we provide 8 quick tips on how you can budget for Christmas. Some of the tips that we share can also be used when budgeting for any big purchase, such as a holiday or house deposit.

1 - Set a budget

You need to work out who you're buying for and what you're spending your money on each year. Write down every person you need to buy a present for and roughly how much you would like to spend on them before you total this all up. It makes sense to set aside money for decorations, a Christmas tree, and even wrapping paper and sellotape. Remember, if you host Christmas dinner, then you need to account for this in your budget too, including food and any drink that you will need. If you need help organising your money into a budget, you may find our list of the best budgeting apps in the UK useful or you could download the 'Money to the Masses free budget planner'. You can also head over to our beginner's guide to budgeting for a step-by-step breakdown of what you need to do to budget effectively.

2 - Take advantage of discounts and offers

If you are clever and take advantage of discounts and offers, then you can make your budget go further. If you have a budget of £25 for a present and an item has been reduced from £25 to £20, you have a couple of choices. You can reduce your overall budget meaning you save money overall, or you can account for that saving in your budget and get more for your money. For example, you could buy another gift for £5 so that you have gifts up to the value of £30, whilst still sticking to your original £25 budget. Keep an eye on our Deals of the Week for discounted items that you can use to fill Christmas stockings.

3 - Start saving now

Don't wait to start saving. The earlier you start saving, the easier it will be to reach your targeted budget goal. Ideally, you should start budgeting for the next Christmas straight after the current Christmas is over. For example, I start budgeting for Christmas in the following January. As you have already worked out your total budget, all you need to do is divide that by 12 - meaning, if you have a budget of £500, you need to be putting approximately £42 a month aside. In fact, you may want to consider dividing it by 11 so that you have achieved your goal by December, meaning you'll have a bit more money should you have any social arrangements around Christmas time. Make sure to check out our top 25 money-saving tips to save you thousands.

4 - Put your money away and don't touch it

Putting money in a jar can be a great way to save, but it can be tempting having the money within arms reach every day. Consider putting the money away into a separate account where it is safe and less tempting to access. Digital app-only banks such as Starling and Monzo make it easy to save by allowing you to move money into savings 'pots' at the touch of a button. You can set goals and even customise the picture to help you focus on your aims. Head over to our list of the best savings apps in the UK to help you find the best place to put money away fuss-free as part of your day-to-day routine.

5 - Treat your Christmas budget as a bill

A good tip to help you stay on track with budgeting for Christmas is to treat it as a bill. If you need to put away £50 a month to ensure you meet your Christmas budget goal, then treat it the same as paying your mortgage or electricity bill. You wouldn't spend the money intended to go towards your mortgage on a night out with friends, so the same rule should apply to your Christmas savings. You could consider setting up a standing order so that the money automatically moves across to your chosen savings platform on payday - that way, you don't even have to remember to do it. Alternatively, many savings apps allow you to set up direct debits into a personalised savings pot, which can also be useful for setting your money aside so you're not tempted to spend it.

6 - Make use of cashback sites

Check out cashback sites, such as Quidco and TopCashback*, to see if the item that you intend to purchase is available to buy through the site. Cashback sites either offer a percentage back as cashback (usually 1% to 25%) or sometimes you can earn certain cash amounts for purchasing specific items. Clicking on the link and buying through the site will ensure that you earn money back, which helps to reduce your overall spend. You can check out our top 5 cashback apps to help you decide which one best suits your unique spending habits. Be aware that cashback sites can sometimes take a few months to credit the cashback, and there may be better offers available if you buy elsewhere.

7 - Shop around for the best prices

There are a lot of sites that allow you to compare prices, such as PriceRunner and Kelkoo, so make sure you do your research before you buy. Also, look to see if any voucher codes are available and consider downloading a Google Chrome extension such as Honey that will search for discount codes and automatically apply them when you go to checkout online. Combining these methods could save you £10s on every purchase you make, which can make a huge difference to staying within your Christmas budget, and could even free up some cash to buy a few extra gifts than you thought.

8 - Get creative

Remember, not everything has to cost a lot of money. Often, the best presents are those that show thought and love, so get creative and see if you can create something homemade - perhaps a scrapbook from old photos or even writing a poem for a loved one. There is good inspiration for handmade gifts on websites such as Pinterest.




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