Christmas on a budget: top tips, statistics & alternatives
Updated 27 May 2022
5min read
It’s time to put up the tree and open the sherry – Christmas is creeping closer day by day. But is this time of good cheer making you feel stressed about your bank balance?
Unlike Santa, you don’t have to get into the red this Christmas. That's why we've put together our top money saving tips and advice for doing Christmas on a budget.
In the UK, the average spend on Christmas presents will be £548 in 2021, a £72 increase from 2020. That’s before you add in the cost of the turkey, the decorations, the alcohol (spend on this goes up 38%!), and the painkillers for the next day.
According to the Bank of England, households will spend on average £740 more in December than other months. That means that the average amount spent on Christmas is a 29% increase from a usual monthly spend.
So how do you do Christmas 2021 on a budget? You don’t have to have a frugal Christmas budget to enjoy the festive season without going into your overdraft, but it does help to plan your finances.
Save ahead, make a plan and make sure you have access to the money you need.
Here are some top tips to help you shop smart and save money this Christmas:
Plan ahead before you hit the shops
Don’t go into the crowds without a clear, overall budget in mind. Know what you can afford to spend overall, and plan out how much of this will go towards food, gifts, drink, decorations, and other. You can now look for the best deals in each category within your budget.
Agree price limits on gifts
This is one of the most popular and effective money-saving hacks out there. Agreeing limits with family and friends means that you eliminate the fear that someone has bought you something much more expensive, and allows everyone to keep a hold over their budgets.
Be honest (tis’ the season!)
If you’re struggling, chances are that you aren’t the only one. If you can’t afford a lavish Christmas, be honest with those around you about scaling back. Opening up means that you’ll feel less pressure to buy lavish gifts and, if you are hosting, others might suggest bringing food or alcohol with them to share the cost.
Watch for free
Christmas is the time for good telly – but you don’t need to break the bank. Most streaming platforms offer free one-month trials. Sign up in December and enjoy relaxing at home with a good family film – just don’t forget to cancel before the trial is done.
Save on postage
Delivery costs can add up. If you are considering using the same platform more than once, look into delivery passes. ASOS offers free, premium delivery for the year for £10 and Amazon Prime costs £7.99 a month with the first 30 days free.
Ask for advice
You may think that there is no other way for you and your family to enjoy your Christmas other than getting into debt. But before you take action, get professional advice on your situation. A financial advisor will be able to help you plan, advise on credit cards and overdrafts, and make sure you aren’t biting off more than you can chew.
Loyalty cards
Many store loyalty cards can save you big money in the long run. If you have cards for your favourite stores already, consider cashing them in December to help with your Christmas shopping costs. If you don’t have a card, sign up now to make use of the extra Christmas costs and rack points for future savings.
Budget gift ideas
Christmas spending statistics show that 91% of women and 87% of men are planning on spending money on Christmas gifts this year – both fallen from last year.
But you don’t need expensive gifts to show your family and friends that you love them. As well as using our above Christmas spending tips, consider these great gift ideas for doing Christmas on a budget:
Give an experience
The best things in life are free, or so they say. New parents may value a voucher for free babysitting above a Bluetooth speaker, and friends might be delighted at your planning of a (free) day out for you all, or cooking a delicious meal.
Gift a memory
Photo printing is relatively cheap (ASDA offers photo printing from 5p) and you can buy inexpensive frames from Ikea, Wilkinson’s, or your local supermarket for a thoughtful, personal gift that won’t break the bank.
Get in the kitchen
The kitchen is a great place to create Christmas present alternatives. Make sweets or bake brownies, wrap them in cellophane and tie with a ribbon to create a beautiful and considerate gift.
Get creative
If baking isn’t your bag, there are plenty of other homemade gifts at your fingertips. Candles, soaps, or jewellery are all possible, and supplies are cheaper if you make similar gifts for multiple people.
How to decorate for Christmas on a Budget?
Everyone wants a little sparkle at this time of the year, but how exactly do you decorate your home for Christmas on a budget?
Reuse or swap
Chances are, no one will remember what baubles and tinsel you’ve used for Christmas past, so dig out your old box of decorations. If you want to refresh your look, why not suggest swapping some decorations with a friend? You’ll both have a refresh without spending a penny.
Shop smart
Don’t run to the pricey Christmas section in the department store. It may look beautiful, but you can get a similar effect by using their styling as inspiration and heading to the supermarket to buy your baubles and tinsel.
Tie it up
Buy a spool of ribbon and tie festive bows to decorate your tree. It will look classy, and only set you back a few pounds.
The great outdoors
Knowing how to decorate outdoors for Christmas on a budget can be tricky, but far from impossible. Making your own Santa signs, window displays or even a DIY Christmas wreath isn’t too difficult. Tie baubles to your trees, ribbons to the gate, and check online for second-hand outdoor lights.
The bright lights of January 2022
Whichever way you cut it; Christmas is an expensive time. Make sure you get back on track straight away in January 2022 by getting expert advice on both your Christmas budget and your recovery plan. As well as this, try these tips for January recovery:
Christmas Bonus
If you are lucky enough to get a Christmas bonus from your employer, don’t automatically add it to your December spending pot. If you can, try and keep some, or even all, of this back to give you a January boost. Alternatively, make a mortgage overpayment or add it to your pension.
Dry January
Many of those who overindulge during the Christmas period cut out alcohol for the month of January. As well as making you feel more refreshed, it will also help your bank balance recover.
Don’t waste a thing
If you haven’t managed to get through all of your Christmas food, make sure you’re planning ahead by freezing it straight away for January meals. If you receive gifts that are going to get shoved into a drawer, try exchanging them for something you needed to buy anyway or selling them online.
