How to Save Money This Christmas

For most of us, Christmas is the most expensive time of the year. There are presents to buy, meals out with friends and colleagues, travel to see family, and a whole lot of food and drink. And with the cost of living crisis hitting us all, these seasonal expenses are going to be even more of an issue. So how can we have a great time at Christmas without it crippling us financially? In this episode we’re going to look at some practical ways we can take control of our spending at Christmas.


Firstly, as with all of your finances, you need to create a budget and stick to it. Work out how many presents you’re planning to buy and set a limit for how much you’re going to spend on each person. Also consider the cost of Christmas parties, hosting people, and travel. Work out what you can afford and stick to your limits.

The earlier you can set your budget the better. The ideal is to set money aside each month throughout the year to cover all of your expenses. If you didn’t do that this year, consider starting this habit next year as it will take so much of the financial stress away from this time of year. Remember to add in a bit of margin for those unforeseen expenses too.

When it comes to sticking to a budget, often I can feel a bit guilty. I know some family members will spend more on my presents than I will on theirs, but that’s okay. Giving gifts is not about an equal exchange of money; it’s about showing your love and appreciation of someone and celebrating a special time of year.

Make your own gifts

Another way to reduce the financial burden at Christmas is to make your own gifts. Maybe you can knit, crochet, cross stitch, paint, or sculpt, or maybe you’d like to learn. Or how about baked goods, framed photos, or a book of special memories from the year? Christmas is of course a time to be generous, but remember generosity isn’t always about money. These presents that have had time and effort poured into them will be treasured far more than anything Amazon can offer.

Buy second hand

How about buying things second hand? Maybe the idea of buying presents second hand sounds a bit strange to you, but why not? There are some great nearly new items in charity shops and on eBay. And by the time Boxing Day arrives all of the brand new presents are no longer band new anyway, so does it really make that much difference? This is an especially good option for presents for young children who probably won’t even notice that some toys come brand-new-in-box and some don’t.

Second hand is also a great option for those obligatory Christmas jumpers or outfits for the work Christmas party.

Joint presents

Buying joint presents with other members of your family is also a way to save money. If what someone is asking for for Christmas is outside of your budget, why not team up with someone else to get them what they want?

Secret Santa

Or what about doing secret Santa? Instead of everyone buying presents for everyone else in your family, each person only needs to buy one present. Even if you spend twice as much as you would normally on that one gift to get something really special, it could still save you and your family hundreds of pounds each year.

Don’t over indulge

Another major expense at Christmas is food. We as a society seem to have built up this image of Christmas not being Christmas unless there’s more food than you can possibly consume. Of course Christmas is a time for celebration, and it’s great to celebrate with food, but let’s not go over the top and make things more expensive than they need to be.

In the UK, approximately 7 million tonnes of food is wasted at Christmas each year. That includes 2 million turkeys, 5 million Christmas puddings, and 74 million mince pies that get thrown out while still edible. Let’s not be part of this problem. Set a plan for your meals over Christmas before you go shopping and use up all of your left overs after the big day.

Plus if you don’t overdo it at Christmas, you won’t need to start an expensive gym membership in January, so you’ll be saving even more money!

Avoid debt

Above all, make sure you don’t go into debt to make Christmas happen. Debt will rob you of your financial future. I’m sure none of your family and friends would want you to be still paying for their presents well into next year, so avoid putting anything on credit card.

There’s an increasingly popular trend when shopping online for buy now and pay later, or buy in three or four instalments. Let’s call this what it is — it’s debt. You might think as there’s zero percent interest there’s no harm in it, but the reason things like Klarna are everywhere now is because it encourages you to spend more than you would have done otherwise. And if you miss a payment, the interest rates soon rocket.

Start next year with a clean slate — don’t get into any kind of debt for Christmas.

Cut back

If you’re already in debt, or you’re going through a tough time financially, it’s okay to cut back. Maybe let your family know that you can’t do presents this year, or that you’ll just do something small — they love you, they won’t mind.

And don’t feel like you need to say ‘yes’ to every single invitation out to drinks or a meal. It’s an expensive time already, and the cost of these social events can really add up, so feel free to be selective.

Remember what Christmas is about

Lastly, let’s remember what Christmas is all about. For most of us it’s about enjoying time with family and friends. And if you’re a Christian, it’s about the miracle of God coming to earth to bring us back into relationship with him. Decades of marketing have warped this season to be all about consumerism — new gadgets, new toys, an excess of food and drink, all sold to us under the lie that it will make us happier. It won’t. Remember “life does not consist in an abundance of possessions”.

Consider, too, how you can give to people in need this Christmas. Maybe it’s donating money, volunteering for a charity, or spending time with someone who’s on their own.

Let’s not get caught up in all of the stuff this Christmas, but let’s focus on what is truly important and make that the central point of our festive celebrations.

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Music: “Coming Home” by LiQWYD & Dayfox. Creative Commons — Attribution 3.0 Unported — CC BY 3.0. Free Download / Stream. Music promoted by Audio Library.