Ways to cut the cost of Christmas

5 min read


Take a look at our top tips to help you cut costs, save money and stick to a budget during the festive season

Orange wooly hat

The temptation to overspend at Christmas can be too strong to resist. According to Deloitte’s UK Christmas Survey 2018, UK consumers planned to spend an average of £567 each on Christmas in 2018, including around £299 on gifts, £151 on food and drink, £66 on socialising and £51 on travel.

But for lots of people this can lead to money struggles and mounting debt. So, with Christmas costs adding up, how can you make sure you avoid overspending and start a new year in good financial shape?

Set a budget

Before you start thinking about getting any gifts, it’s worth taking the time to draw up a quick budget. Set a total budget for presents, write a list of who you’re buying for and then work out how much you can afford to spend on each person – or try out the Money Advice Service’s Christmas money planner. Last-minute impulse buys are often the most expensive and least appreciated, so it pays to plan ahead. This is also true for things like food and drink. Thinking about the meals or events you’ll need to shop for, and keeping a list of it all, can help you avoid over-buying and having lots of food go to waste.

Shopping bags

Stick to what you can afford

If you have a big family, or lots of people to buy for and feed, festive spending can really mount up. For gift giving, Secret Santa – where you buy a present for one person and the gift giver is kept hidden – can save you a lot of money. Alternatively, you could agree a spending limit for gifts, just buy presents for children, or give experiences like cinema vouchers instead of presents to get better value for money. If you’re on a really low budget, ‘IOU cheques’ with promises of babysitting, dog walking, gardening or cooking are free for you but can mean a lot to someone else. When it comes to Christmas dinner, if you have lots of people coming over, consider asking them to bring a course each, or a different contribution, to spread the cost and stress.

Prepare for the sales

Be prepared for shopping events like Black Friday, Cyber Monday and pre-Christmas sales (you can find out which retailers currently have sales on at Money Saving Expert). But don’t be lured in by flashy deals that look better than they really are. Sellers have been known to artificially increase the price of products just before these online sales to make their discounts look more generous. If you want to buy particular items, research the best deals in advance on price comparison websites like Price Runner so you can spot real bargains when the sales start.

Purple fridge

Look out for food and drink offers

You can save money if you buy some of the food and drink you’ll need ahead of time. Look out for special offers on non-perishable items from November onwards, or earlier if the items will last. From beer, wine and spirits to chocolates and biscuits, and chutneys and sauces to Christmas crackers, a lot of supermarkets run cut-price or buy-one-get-one-free offers that can help you keep costs down.

Make the most of vouchers and cashback

Search for discount or voucher codes online to find websites offering money-off vouchers for your favourite stores. Alternatively, you could consider buying through a cash-back website that offers free registration. These websites simply pay you a percentage of the money you spend when you click through them to a participating retailer’s website – they have links to thousands of high street shops, as well as energy, banking and travel deals.

Toy plane

Book your travel early

If you’re going away or visiting family and friends over the holidays and plan to take a train, book your ticket now. Not only will this ensure you get a seat, but you can also get great deals on advance tickets. To save even more money, try avoiding peak times, being flexible with the date or time you travel, checking alternative routes or seeing if you’re eligible for a railcard. Remember to check for any train strikes, maintenance works or closures before you book! If you plan on flying anywhere over Christmas, again it’s best to book early and use flight comparison websites like Skyscanner or Travel Supermarket to find the best prices.

Save on postage

It’s not just presents and cards that cost a lot, postage can really rack up too. First class stamps start at 70p (compared to 61p for a second class stamp) and parcels cost considerably more, so where possible plan ahead and send cards and packages by second class post. You can find up to date stamp prices and the last recommended UK and international posting dates at Royal Mail (the prices mentioned above are for 2019). If you want to save even more, try and use the post as little as you can over the holidays. Hand deliver gifts and cards where possible, or give a few to family or friends to pass onto others, and make use of e-cards, which are free to send.

Black wallet

Think before using a credit card

Borrowing money to pay for Christmas is one of the most common ways to get into debt. The best way to avoid this is to start saving early, setting aside a regular amount in the months leading up to the holidays (take a look at our article on money management for more savings tips). If you do need to use a credit card, try to clear the balance as soon as possible to avoid interest charges – even with a 0% credit card, the charges can be very high once the no interest period is over. You’ll also usually be protected if your purchases are faulty or fail to arrive if you use a credit (or debit) card. Find out more about this at the Money Advice Service.


Finally, it’s important to remember that Christmas is really about spending time with the people you love. You don’t need to spend a fortune on expensive presents that’ll leave you worrying about money for the next 12 months.

Your Christmas savings checklist. This image is an infographic and has alternative text available if you are using a screen reader.

Your Christmas savings checklist

  1. Work out what you’ll be spending money on: Think about everything you’ll need to buy over Christmas, including gifts and cards, food and drink, decorations, as well as any other expenses you might have, like travel or going out with friends, family or colleagues.
  2. Set yourself a total budget: Set a spending limit for each of your expenses and add them up to get your total budget. It’s important to be realistic when it comes to what you can afford – this can help to avoid any stress or overspending later on.
  3. See what you need to put away: Work out how much you’ll need to put away each week or month to hit your goal in time for Christmas. Take a look at your salary or regular income, plus all of your expenses, to see where you could spare some extra cash – and reduce your budget if things look too tight.
  4. Start saving as early as possible: Begin putting some money away as early as possible – the sooner you start, the less you’ll need to put away each week or month. However, if you have any loans or debt, it’s important to make sure you’re able to pay these off before you put money into savings.
  5. Find a good home for your money: Do some research to find the best account for your savings – there are lots of easy or instant access accounts available that could provide a good home for your cash. Or, you could see if your current bank account will let you set up a separate savings account or pot.

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