Tips for staying on top of spending this festive season

Please see our glossary for information on the financial terms used in this article.

The festive season is fast approaching, and as delightful as it can be to celebrate with friends and family, increased spending puts pressure on budgets that may already be stretched by rising living costs.

How much do we really spend during the festive season?

According to the Bank of England, UK households spend around £713 more in December than in a typical month, which is roughly 29% extra¹. So, if you’re budgeting for the holidays, you’re definitely not alone.

Here are seven tips to help you stay on track during the festive season:

Set a clear budget and shop wisely

Seasonal sales like Black Friday and Cyber Monday can help you save, but they can also tempt you into buying things you don’t need. Start by creating a list of what you actually need and setting a clear budget before you begin shopping. If something isn’t on your list, think twice before adding it to your basket. This helps you benefit from discounts without blowing your budget.

When you do shop, take the time to compare prices across different retailers, both in-store and online. Look for discount codes and cashback opportunities and always factor in delivery costs and check return policies.

Be wary of scams

It’s not uncommon for unauthorised traders to pose as legitimate ones, especially online. Watch out for fake discount links and phishing tactics. To protect your money and personal details, only buy from trusted retailers and secure websites. Stick to known outlets for branded goods and ensure they offer reliable delivery and returns policies.

Consider gifts that last

Instead of buying a child something that might be forgotten by January, why not give a gift that grows with them? Whether you’re a parent, grandparent, auntie or uncle, one example of an ongoing present is a Junior Individual Savings Account (JISA).

JISAs are a flexible, simple and tax-efficient way to build long-term savings for a child. Over the years, contributions to the account can grow into a valuable nest egg that helps pay for university, a first car or even a home deposit when they turn 18.

Anyone can contribute to a JISA, but the account must be opened by someone with parental responsibility or legal guardianship, who acts as the ‘Registered Contact’ until the child reaches 18. Because the money is locked away until then, JISAs are designed for long-term investing.

JISA tax advantages depend on your individual circumstances and JISA tax rules may change in the future.

Discover The M&G Junior ISA.

Welcome financial support doesn’t have to stop there. It can come in many forms and at different stages of life. For instance, it could be a one-off financial boost, a regular gift or a lasting leg-up. It could even take a more charitable form, using your assets to help support the causes closest to your heart.

Factor in shipping and postage when sending gifts

If you’re posting gifts, check prices and postal dates for UK and international services. The most economical dates may be earlier than you think. Early shipping helps you avoid costly last-minute express fees and disappointment. A Christmas gift in January, whilst welcome, isn’t ideal.

Watch out for ‘Buy Now, Pay Later’ temptations

Many shops and websites now offer a ‘buy now, pay later’ service that can sound very appealing, especially at a time like Christmas, when costs are usually mounting up. However, it is important to take into account the fact that you will have to pay at some stage. You’ll need to be sure that you will have the money available when the payment is due; late or missed payments can carry substantial charges and may affect your credit rating.

Reuse and repurpose

Buying new decorations every year can quickly add up, so start by making the most of what you already own. Before heading to the shops, check your storage – you might be surprised how easily last year’s decorations can be refreshed or rearranged for a new look.

If you need something extra, try DIY solutions using materials you already have. Homemade decorations and reusable wrapping paper are not only budget-friendly but also help reduce waste. A simple habit like saving ribbons and gift bags each year can pay off – next Christmas, you can turn them into decorative tags or unique wrapping paper without spending a penny.

Think beyond gifts

Presents aren’t the only expense at Christmas. Travel, dining out and multiple social gatherings can quickly add up. Hosting celebrations at home instead of booking costly venues can make a big difference. Simple, low-cost activities like winter walks, festive markets or movie nights can help you enjoy the season without overspending. If you’re travelling, plan ahead by booking tickets early and looking for off-peak options to keep costs down.

Using these strategies and staying conscious of your spending can help you avoid a financial ‘hangover’ in January. And there may be other areas of your budget that could benefit from a closer look. You may find it helpful to explore this free budgeting planner offered by the Citizens Advice Bureau: Work out your budget – Citizens Advice Bureau.

 

¹ Bank of England, ‘How much do we spend during the festive season?’, (bankofengland.co.uk), December 2024