It’s Beginning to Cost a Lot Like Christmas

Christmas can put us under tremendous pressure financially. Whilst we’re still in an unprecedented cost of living crisis, Christmas can take that pressure to a whole other level. Nobody wants to scrimp on Christmas presents or entertaining. Nobody wants to feel as though they’re letting their children down.

Let’s stop you there. Christmas – or any special occasion – is not made better by having more. More food. More presents. More lights. More decorations. Ultimately, those are not what make Christmas. For those who celebrate – and even many of those who don’t – the ‘magic of Christmas’ isn’t just a soundbite. It’s a feeling; an atmosphere. You can celebrate without breaking the bank – or worse, maxing out on unaffordable credit.

Money Doesn’t Make Magic

Here’s a snippet of a piece we wrote after last Christmas, based on stats from the Money Charity:

Christmas can be financially overwhelming at the best of times, but the difficult financial landscape that we are living through is making it worse… 52% of people have reported that they will spend less on Christmas this year due to the rising cost of items and especially the rising cost of energy in the New Year.

The Money Charity reported that the average UK household will spend £1,811.70 on the Christmas period, 80% of the average monthly UK income.

It’s important to put the festive season into perspective. It’s a fairly fleeting period and there are many ways to economise without too much compromise. Crucially, there are also gigantic pitfalls to avoid. There are budget-friendly ways to keep Christmas affordable. Let’s look at swerving those pitfalls first.

Showing Interest

Most importantly, try to avoid spending what you don’t have. Sounds obvious, doesn’t it? But we’ve all done it: maxed out the credit cards thinking we can sort it next month. Spoiler alert – we never ‘sort it next month.’ It sits there, malevolently, on the balance accruing interest. Every month. Then the interest accrues interest. It’s a vicious circle.

Yet more vicious are those all-too-tempting offers to entice you into applying for store or catalogue credit. You know the sort of thing. Pay nothing until next year. 20% off your order. Fabulous free gift… Don’t get swept up. You’ll end up paying way more than they appear to save you. Even Klarna and Pay in Three options need careful tracking to avoid new year shocks.

Easy to say, we know, but how can you make Christmas special while trying to avoid debt? Read on.

Christmas Shopping Savings

Here’s where we feel the most pressure, especially for our children. But there’s the thing – the youngest children will never know their gifts are pre-loved or unbranded. Older children may be so impressed with their branded goods that they don’t care it’s from Vinted or eBay. Look out for sales, too – many retailers will discount stock before Christmas. Don’t get carried away with so-called Black Friday offers though. Remember. You’re only saving money if you would’ve bought it anyway. Other tips:

• Set a Spending Limit: Agree on a price limit with family and friends to manage expectations and reduce overspending. That way, you won’t need to feel pressurised into keeping up with anyone.
• DIY Gifts: Do you have a skill or talent that you can make use of? Handmade items, like baked treats, personalised mugs, or homemade candles, can be thoughtful and budget-friendly, especially if prettily wrapped.
• Secret Santa: If you have a vast group of friends, cousins, or colleagues, rather than buying for everyone, suggest a Secret Santa exchange.
• Experience Gifts: Consider gifts that are experiences or time-based, like vouchers for a coffee date, babysitting, or a home-cooked meal together. Groupon often has great deals on experiences local to you. Tell recipients to keep an eye on the expiry date, though.
• Look for Sales and Cashback: sites like TopCashback or Quidco for cashback on online purchases and search for discounts on Vouchercodes. Research online retailers for sales and offers or google ‘best price.’ A word to the wise – always factor in shipping and double check a site’s legitimacy.

Entertaining and Christmas Dos – and Don’ts

We know it’s not just the gifts that cost. Christmas parties and events can soon rack up, too. Not to mention Christmas dinner. But do you really need that organic bronze turkey and ready-prepped roasties?

• Look for Free Events: Many towns have free festive markets – check out Independent Street here in the North West – as well as light displays, or Christmas carol concerts. Look at your local Facebook community groups – there are often whole streets lit up that you can explore for a small donation to charity.
• Host a Bring-a-Dish (and a bottle) Christmas Gathering: Invite friends and family over and ask everyone to bring a dish, as well as a bottle. This reduces costs, and you’ll get a nice variety of food. Just be aware of any allergies though.
• DIY your Decorations: Get creative with homemade Christmas decorations, like garlands from dried oranges, paper snowflakes, or pinecones. This can be a fun activity with kids as well – they’ll love it. Just don’t get too precious about themes or mess.
• Christmas Film Night at Home: Watch Christmas movies at home, complete with homemade popcorn and hot chocolate. Older movies are invariably available on free channels – set up a recording ‘wish list’ now and introduce the kids to some of your old favourites.
• Outdoor Winter Walks: Wrap up and go for a walk, whether through a local park or a forest trail, for a scenic and budget-friendly way to feel festive. Again, your Facebook groups are a great source of info and advice here. Take flasks of hot chocolate (or mulled wine) and mince pies.

The (Budget) Big Food Shop

As we said, the best award-winning turkey or organic goose-fat roast potatoes are NOT what will make your Christmas dinner special. Trust us, sitting around a table with family or friends is everything. The food is almost incidental.

• Plan and Prep: You can start buying non-perishable items in November to spread the cost. Also, look out for supermarket promotions, especially for frozen items. Frozen turkeys are NOT a fail – once you’ve added stuffing and a drop of sherry to your gravy, nobody will know.
• Use Loyalty Points: If you’ve been saving Tesco Clubcard, Nectar, or Boots Advantage points, redeem them for Christmas grocery shopping or gifts.
• Cook from Scratch: Homemade sauces, gravies, and desserts often cost less than store-bought versions and taste fresher. Keep your leftovers, too. Boxing day is all the better with a turkey butty!

Your Christmas can still be special. But don’t impact the rest of the year – and beyond. Consider starting a savings plan early for next Christmas. Perhaps set up a Christmas fund to save small amounts each month. Even £20 a month will give you £240 by next Christmas, helping you stay within budget. Christmas 2025 will thank you!

Keep sight of what really matters and if you’re struggling, you’re not alone – don’t be afraid to ask for help and advice. That’s what we’re here for, so if you’re struggling with debt (or in financial difficulty), speak to a member of our team. We aim to help you understand all your options.