How to budget for a fabulous Christmas

Find out what you need to save for and how to do it

Sometimes, getting to grips with managing your finances can seem like a fine balancing act. And throw the expense of Christmas into the mix and you’re sure to feel overwhelmed! But fear not. With our helpful guide on how to budget for a fabulous Christmas, you’ll be feeling in control and ready to enjoy the festive season in no time at all.

What you may need to save for

Christmas is always a wonderful time of year filled with family, friends and festivities. But when you think of all the Christmas parties and gatherings you’ll attend, and not to mention the gifts you’ll buy, it really can be one of the most expensive times of the year too. 

Here’s a list of the top things people tend to spend money on during the festive period: 

  • Christmas decorations
  • Christmas gifts
  • Wrapping paper, gift tags and accessories
  • Party clothing and footwear
  • Food and drinks
  • Travel and accommodation

It’s easy to see where your money can soon disappear to, and that’s why budgeting should be top of your Christmas wish list this year.

Why it’s a good idea to budget for Christmas

It’s always a good idea to budget, no matter what the occasion, because budgeting puts you in control of your money. By putting a little money aside on a regular basis you’ll soon start to build up a pot of savings you can use, to help you to afford the Christmas you’d like.

Many people start to put a little money aside each month from the start of the year, which is a great idea, so they have a pot of money available to spend at Christmas. But even if you haven’t started yet don’t worry – there’s still time – as putting a little aside now can still help to make a big difference for when Christmas arrives.

Simple budgeting tips

The best way to start budgeting is to understand where your money is going and where you could make cutbacks on your spending.

Understand where your money is going

Make a list of your current spending habits, categorising it into different areas so you can see what you’re spending your money on the most. To get you started, think about outgoings such as: mortgage repayments/rent, utility bills, mobile phone bills, food and drinks, clothing and leisure activities. You’ll then soon start to build up a picture of how you’re spending your hard earned cash.

Identify where you could make cutbacks

Next, from your spending list, identify any areas where you could cutback your spending. Do you really need to buy that posh coffee every day or that glossy magazine? By only buying your special coffee (at £2.50 a pop) twice a week, rather than every day, you could save around £650 a year! We know – amazing, right? Other areas such as reviewing your utility bills and changing your supermarket could also have a big impact on helping you to put a little aside more often. So, just by making some simple cutbacks you could really surprise yourself at how much you could save and put towards your perfect Christmas.

Setting a Christmas budget (and sticking to it)

Now you can see how you could afford to put a little aside each month, you should set a realistic budget for your Christmas spending. Just like before, make a list of all the areas/things you’ll need to pay for to help you stay on track for a stress-free Christmas.

So, that’s it. Now that you’ve learned a few tricks on how to budget for Christmas, you can sit back, relax and enjoy your well-planned Christmas. You may even allow yourself a little tipple to celebrate your new-found budgeting self. Cheers!

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.