How to save money this Christmas – and avoid getting into debt

Christmas can be a tricky period when it comes to money – and this year is set to be trickier than most.

With furloughs, unemployment and ongoing instability and uncertainty, more people are struggling with precarious finances. And the pressures of the festive period could tip you over into the red.

But there are things you can do to make sure Christmas is more affordable for you this year. And being more careful with your money doesn’t mean you can’t have a great time.

This could be the year to reassess your priorities at Christmas, and switch the focus from consumerism to something else entirely.

We asked a couple of finance experts for their advice on how to manage your money this season, and how to make sure you keep your head above water.

Catherine Morgan, financial coach at The Money Panel, says it’s a good idea to start by looking at other areas where you can save money – like your bills.

‘Review your outgoings and make sure you’ve got the best deals,’ Catherine tells ‘There are lots of deals to be had at the moment, particularly on energy.

‘Check out money reward apps to make big savings or generate cashback on purchases you would be making anyway.’

Catherine adds that you should also challenge the beliefs you hold about money, especially during the Christmas period.

‘Consider what is truly important to you over holidays,’ she suggests. ‘Is it time spent with family and loved ones, or are you subconsciously trying to “keep up with the Joneses”?

‘Get financially naked! Often when we feel in a state of “not enough-ness” the simplest of acts such as opening your bank statement can  become incredibly overwhelming.

‘Getting financially naked is about taking those steps: open your statements, identify where money is being spent and if there are any leaks which can be plugged.

‘Is that subscription actually being used, or adding to your life in any way? Are you consciously spending money in a way  that supports the values you hold in life?’

How to save money this Christmas

A worrying new study has found that nearly a third of Londoners will use credit to fund festivities as the pandemic takes its toll.

Despite this, 42% say they are planning to spend more on food and drink compared with 2019, and 25% say they will be spending more on clothes and accessories.

Hayley Millhouse, MD of OpenMoney Adviser Services says it is always best to save up for big purchases wherever possible.

‘If you’re planning on taking out an overdraft or credit card for a large purchase, it might be best to hold off these plans or try to save up instead to avoid tying yourself into a monthly payment moving forwards,’ Hayley tells

‘Buying gifts through sites like Quidco can be a great way to maximise shopping too as you can earn cashback on every transaction.’

Plan ahead

‘Sometimes it helps to have everything laid out in front of you,’ says Hayley.

She suggests writing down your estimated festive spending alongside your day-to-day outgoings and adjusting your budget accordingly.

‘Seeing exactly what you have makes it much easier to create a Christmas savings plan,’ she says. ‘Remember that it’s never too late to start saving a few pounds here and there when possible too.

‘This could just be a matter of collecting loose change in a jar, only to be dipped into for stocking fillers, or you could take the step to open a savings account for Christmas.

‘Regardless of how you go about it, every little really does help and just having a pocket of cash put aside can put your mind at ease.’

Do your research

Hayley says that panic buying can lead to overspending when there was most likely a saving to be made elsewhere.

‘It’s so easy to give into the hype and get swept along the high street or get sucked in by adverts online,’ she explains. ‘It’s common to be told to simply do it all online which certainly has its perks, but for some, a touch of the mad rush is all part of the fun.

‘Though the “mad rush” will almost certainly be very different this year, you’ll still benefit from doing your homework beforehand if you are still venturing out.

‘Popular voucher sites such as Groupon often have great offers on a wide variety of gifts too, so shopping smart really can help you save for Christmas.’

Be prepared to say no

‘Spending can add up really quickly throughout the Christmas period without you even noticing it,’ says Hayley. ‘As it’s unlikely we’ll be allowed to meet up in large groups this year too, we’ll probably end up going out with fewer people, more often, to ensure we’ve had the chance to see everybody we want to – and that in itself adds another expense.’

It’s normal to use Christmas as an excuse for spending, but Hayley says it’s worth considering whether you really can afford to commit to everything you’re invited to.

‘The same principle can be applied to buying gifts,’ she adds. ‘Knowing where to draw the line is key.

‘It’s the best feeling being able to treat those close to us, but it’s certainly not the main point of Christmas.

‘If you find yourself struggling to gather gifts for friends of friends and extended family members that you rarely see or speak to, take a minute to think about whether it really is necessary.’

Batch cook

‘If we look at December as a whole, much of what we do throughout the month feeds into the “big day”. Another way to ensure you’re getting bang for your buck is to batch cook meals in advance,’ suggests Hayley.

Hearty soups, warming stews and casseroles are just a few of the great winter meals that you can start cooking in bulk now. Hayley adds that making meals in bulk and freezing them until you need them can also help you cut back on costly last-minute trips to the local shop and takeaways.

‘Prepare portions for your working day at home too can also help you cut down the amount you spend nipping out for lunch,’ she says.

‘Those supermarket meal deals might seem cheap and convenient at the time, but it all adds up.’

Natalie Montgomery, founder of Almara Consulting, has shared her tips for families who need to stretch their money a little further this year:

Work out what you can realistically afford

Since there are still seven weeks until Christmas, there is still enough time for those who wish to save this Christmas to plan ahead by budgeting before spending to uncover what they can realistically afford without entering the new year with fresh debt.

Budgeting effectively this Christmas can be made easier by using one of the helpful online budget planning tools available.

Take advantage of cashback sites

By signing up to free cashback websites (stay clear of any that require you to pay), you will be paid when you go through their site to spend with retailers. When used correctly, shoppers can save loads of cash.

Pre-owned doesn’t need to mean pre-used

Along with pre-loved goods, many sellers who use resale websites such as Ebay also sell new items that have never been used (tags, boxes, etc included).

According to findings from PR Newswire, 33% of all goods sold on Ebay globally are brand new. These new goods have a high chance of being resold for a price well below their original retail price since they have been pre-owned.

Do you have any saving tips to share? We want to hear from you.

Get in touch:

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