OK so we’re going to talk about how to save money at Christmas and still have an amazing holiday.
Hi, I’m Sam. I’m on a mission to help women take control of their finances. How? With some simple tips around budgeting, saving and investing.
I love Christmas, it makes winter almost bearable. I don’t do winter sports and I hate the cold.
But whack on those fairy twinkling lights, blast some Marah’s Christmas classics and you got yourself one happy camper, my friend.
Throw some mince pies in the oven and I’m in seventh heaven!
But it can get expensive. I mean break the bank pricey. All those gifts and food.
Then you have the Santa’s grottos; the shows, the parties; The light extravaganzas, the Christmas spectaculars. You get my drift.
Then, right after Christmas comes New Year’s, and all the jacked up NYE party prices followed by the taxi ride home.
Next comes January and a long 5 weeks before payday. It could be a prescription for a pretty miserable time unless we take control.
So here goes my tips for staying in the financial pink for the Christmas holidays. Let’s keep it fun and take the stress away. Ho ho ho!
Tip 1 To Save Money at Christmas: Make A Budget
The best way to save money at Christmas is to make a budget and then stick to it.
Once you decide how much you want to spend, you can be intentional about how you spend your money, you can be in control.
You can drive the bus and take it where you want to go, rather than careering all over the highway in the hope it gets you over the bridge in one piece.
Decide how much you want to spend on Christmas and budget for it.
The easiest way to do this is to assess how much you spent last year on Christmas.
Then use this number to decide how much you want to cut back on Christmas spending this year.
Step 1: Calculate How Much You Spent Last Year
If you take a look at credit card or debit card statements, or old purchase receipts you can get a pretty good idea of how much you spent on Christmas last year.
Go through your diary to remind yourself of social activities to estimate any cash expenses, then add a buffer to get an estimate.
Be sure to include all the various types of Christmas spending here:
- Christmas clothes (matching PJ sets, Christmas jumpers, occasion wear)
- Food on the day
- Food for parties in the run-up to Christmas day
- Gifts
- Trips to various Christmas celebrations
- Christmas Decorations
- Christmas Tree
The list goes on and on…
Step 2: Decide Your Christmas Budget
You may have felt that you spent a bit too much last year.
If so, you want to shave a decent amount off that final figure to get your target spend for this year.
Don’t Be a Scrooge on Yourself
If you try to reduce your spending too much, too fast, you’ll make yourself miserable. Then you’ll fall off the wagon and end up spending even more than last year!
Remember, Christmas is during the darkest time of the year. It gets dark at 3.30pm high up in the Northern hemisphere. Waaa…waaaa!
Those celebrations are good for your mental health so you need some of them, if not all of them.
When it comes to spending reduction, just like with dieting, slow and steady wins the race. Every time : )
I suggest you shave a decent slice off, great! Try the steps below. If you can shave some more off after that, even better!
It’s better to undershoot than to overshoot.
If you make a sensible money-saving budget for Christmas and stick to it, you can save some serious money at Christmas and still have a great season.
Tip 2: Create a Christmas Sinking Fund
Creating a sinking fund is the second tip to doing Christmas on a budget.
Once you’ve created a realistic budget for Christmas, start saving for it as early as possible.
This will make Christmas feel more affordable because you’re smoothing out the expenses for the year, rather than paying for it all at once.
Worse still, you’re not being forced to put it all on a credit card and then facing a pile of credit card debt with astronomical interest rates (eek!).
To stop yourself from accidentally spending all this Christmas money, make use of sinking funds.
A sinking fund is a sum of money set aside and dedicated to a specific purpose, to be used at some point in the future. This way we don’t see a massive jump in expenses all in one go.
Sinking funds are a really powerful way to keep you in budget and in control.
How To Set Up a Sinking Fund
Some banks like Monzo Bank (UK) give you the functionality to create sinking funds within your current account. Monzo calls them ‘pots’.
If you don’t have this feature with your bank account, you can just set up a separate instant-access savings account and call this your sinking fund.
Other banks allow you to rename your accounts which is nice and handy. So you could rename a savings account ‘Christmas savings account’ or ‘Christmas Sinking Fund’ to help you keep track of it more easily.
Once you’ve decided on your Christmas budget, you simply divide that number by the number of months between now and Christmas. This would be the amount you transfer into your Christmas sinking fund each month.
An Example:
You start your sinking fund in April.
You determine that your Christmas budget is $600.
April to 1st December is 7 months
So, you have 7 months to raise $600
600 / 7 = $85.71 per month
Therefore, you need to save $85.71 each month between now and the end of November.
Automate the Process
The next step is to set your account to automatically transfer this amount of money into your Christmas sinking fund each month.
Set it to transfer a day or two after payday to give yourself a cushion.
If this is an automated step, you don’t have to do anything after setting it up.
Now you just sit back and watch your sinking fund grow. No worries that you’ll accidentally spend the money and be caught short come December.
As long as you don’t dip into this pot ahead of time, the money is there to take care of all the extra expenses that come with that magical time of the year.
If you’re reading this in December and you haven’t had a chance to make a sinking fund, no worries, start one next year.
Tip 3 Keep Track of Your Spending
The first two tips were for planning ahead of time.
The next 12 tips are for Christmas time itself. We are at battle stations people.
Estimate a budget you’d like to stick to and then track your spending.
Christmas is one of the most lucrative times of the year for businesses. They’re going to milk it for everything it is worth.
You can’t blame them for trying, they have bills to pay just like the rest of us. But if you need to stay within budget, you can’t get distracted by the special offers.
Save money by sticking to your budget and keeping track of your spending.
Use tools like your credit card or banking app, the cash envelope method, or just good old-fashioned paper receipts. I like the spending tracker app on iOS.
Knowing your numbers is a powerful way to reduce stress and be in control.
Tip 4 To Save Money at Christmas: Use Quidco (UK Only)
I use the cash-back app Quidco whenever I shop online. I usually convert mine to Amazon vouchers to get even more cashback.
A lot of my Christmas gifts come from Amazon anyway, so this is a nifty little trick to get some money off gifts.
How does Quidco work?
Whenever you see advertising online, the brand that puts out the advert has paid everyone involved a commission see it..
Quidco pays you a slice of that commission back, in the form of cashback.
How to Use Quidco to save money at Christmas
Find the brand you want to shop at on the Quidco website.
Then, click on the Quidco “Get cashback” button to make sure your purchase tracks properly.
You have the use a browser rather than a store app for this to work.
I find it’s always worth checking Quidco before doing any online shopping, because it is basically free money.
Tip 5: Be Realistic About Gifts for the Kids
Toys were really expensive when I was growing up. My parents were first-generation immigrants. They made a nice comfortable life for us in the suburbs.
I grew up in a house with a car and a grassy backyard to run around in. It was a dream life, to be honest.
But there were no extra frills compared to my classmates at school. My parents had huge families back home to support financially. As a result there was no money left over for ‘extras’.
We didn’t have satellite TV, video games, fashionable sneakers, or very many toys.
Toys were expensive in the days before the Chinese economy exploded. Toys were special.
I remember looking longingly at the doll’s houses of my schoolmates when I’d visit their houses for birthday parties.
I totally get why parents want to shower their kids with all the latest toys and gadgets today.
As parents, we want our kids to have all the things that we missed out on. But toys aren’t special anymore. They’re plastic tat, frankly.
The more bells and whistles they have, the less imagination they spark.
How Long Will They Play with It For?
Sometimes I look at the really luxurious toys in a store and I think to myself, ‘this will excite my daughter for about 4 weeks and then clutter up my living room for 4 years’.
Before you get the gift, think long and hard about its shelf life. Is it something that your kid will interact with and make use of for a long period of time?
How long before it makes it to the gadget graveyard?
Kids absolutely want expensive gifts sometimes, and it is OK to spend a reasonable amount of money on toys.
As a compromise, think creatively about gift-giving.
Work with grandparents and other family members and club together to get one expensive gift, for example.
Instead of expensive toys remember that your kids value quality experiences with you.
Especially when they are younger, put more emphasis on time together, rather than money.
Simplicity Parenting
For some great ideas on toys that will ignite your child’s imagination, check out simplicity parenting techniques.
Tip 6 To Save Money at Christmas: Ditch Gifts for Adults
Here’s a controversial tip for saving money at Christmas: consider ditching gifts for adults altogether.
Depending on where you are in your life, those scented candles, socks and bookmarks may start to get a little redundant.
If you have younger adults in the family who are starting out in life, a gift may be more welcome.
But for the more settled grown-ups with kids, it might be time to say goodbye to the knick-knacks.
As a compromise, you could do a family Secret Santa.
I like to put lottery scratch cards in Christmas cards. It might just be the best gift they ever get!
For some friends, I like to send them cards with long messages that I take time to craft.
I like to think that these messages that mention some fond memories of our friendship from years back are as heartwarming for them to read, as they are for me to write.
Tip 7: Buy Secondhand Gifts
Thrift stores have the most amazing bargains and can be great places to find gifts for kids and adults alike.
Some items are brand new or nearly new. Throughout the year, have a browse every time you pass by a store.
Start stockpiling Christmas gifts ahead of time.
Tip 8: Make Homemade Gifts
If you have the time and the skills, homemade gifts are a welcome and much-appreciated gift nowadays.
They are also a great way to do Christmas on a budget.
Last year I gifted homemade chutneys, cookies and cakes to family and friends and neighbours. Most folks don’t have time to bake so they really appreciate it.
In my opinion nothing beats the taste of a home-baked cake.
You can also save hundreds of dollars.
A large homemade cake can cost as little as $3 to make. The same cake would cost $30 to buy in the store.
Multiple that by ten and that’s a huge saving.
We used crab apples from the garden so the main ingredient for the chutney were free.
Make it a family tradition
It’s also a fun activity to do with kids. Just make them in batches over the weekends leading up to Christmas and you double up gift-giving with Christmas activities.
Icing the Christmas decorations is a super festive (and delicious) family tradition.
If you are crafty, you could also make baubles, wreathes, bath bombs, candles, and all sorts of other beautiful things.
It is such a novelty these days. People appreciate a homemade gift so much more than a shop-bought one.
Tip 9 To Save Money at Christmas: Create a Christmas Menu and Stick to It
Another way to save money at Christmas is food. Food is a big spend over the holiday.
Supermarkets take Christmas VERY seriously. I personally get very excited about the various Christmas adverts on the telly. The John Lewis ones usually bring a tear to my eye.
But I don’t go nuts over the food shop. I don’t want to have a stroke over Christmas!
I just think that being in the Emergency Room would put a real dampener over Christmas (lols).
But seriously, I don’t want to spend 9 hours slaving away over a hot stove and NOT enjoying Christmas.
Get treats, and make it a special meal, but don’t bankrupt the household with food for Christmas.
I remember one family Christmas we literally never left the kitchen. We made countless dishes. We refilled the dishwasher 17 times (yep, that I counted).
And after it was all done, we sat down for 2 hours before getting up again to make chocolate truffles. YES TRUFFLES.
I was exhausted and it sucked half the fun out of it. Sure, the littler kids had a fun time, but my parenting philosophy is that the whole family should have fun.
I don’t want to raise my kids to think it’s their ‘job’ to be exhausted all the time just for the sake of their kids.
Plus – I don’t think anyone noticed the truffles.
Set a menu, set a budget. But don’t go nuts.
Tip 10: Ask Folks to Bring a Dish
If you are hosting on the day, be bold and let guests know what they can bring.
Guests will often message you ahead of time ‘Can I bring anything?’. When they do, don’t just reply ‘Oh, just bring yourself!’, be specific and articulate your needs.
I know I know, it can be exhausting to think of what to ask for when you already have so much to plan, but people need specific instructions so that they know how they can help.
The easiest response may be to ask for alcohol as this is often the priciest item on the shopping list. After this could be dessert.
Another item that might be helpful is something to accompany the second meal.
You know, the one that happens about six hours after everybody says that they “couldn’t possibly eat another bite”
: )
Hell, If they’re staying for a few days ask them to be responsible for an entire meal. They can own the post-meal entertainment as well!
Give them ‘skin in the game’. Then they’ll be accountable for part of the visit, and they’ll be less likely to grouse during the trip.
Boo yeah!
Tip 11: Get Decorations and Trees for Free
A great way to get Christmas decorations on a budget is to check out the Olio or Next Door apps in the UK.
They often have local people giving away artificial Christmas trees for free. I see at least a couple each year.
I got a 6-footer with working plug-in LED lights which has served me nicely for three years now! And I stopped it from going to landfill where it would have languished for hundreds of years.
Tip 12 To Save Money at Christmas: Christmas Jumpers from Thrift Stores
Rather than buying them new, pick up your Christmas jumpers from charity shops/thrift stores.
I picked up a Christmas jumper for my daughter for 50p and one for myself for £2! Not bad for something I wear one day a year.
If everyone wore a pre-loved Christmas jumper on Christmas Day, the CO2 emissions saved would be the equivalent of taking 56 million cars off the road for a day – WOW.
Tip 13: Shop the Sales for the Following Year
This may seem super future-focused, but the deals are amazing. Perfect if you want to save money at Christmas.
I picked up some amazing bargains on full-sized wooden toy soldiers for the front lawn.
I ran out of patience with packing away so many fairy lights last year – wooden ornaments are my jazz from now on!
Tree decorations, napkins, crackers, greeting cards and many other non-perishable items are also a great find in the sales.
Tip 14 To Save Money at Christmas: Enjoy Frugal Christmas Traditions
Taking advantage of some fun frugal family traditions is a beautiful way to save money at Christmas.
These activities are free or very low cost and very enjoyable.
For younger children, they are literally all you need.
As your kids get older they get a bit more demanding, so you might want to budget for one or two paid-for Christmas shows to supplement the free activities.
Check out your local community theatres and local authority for low-cost options, some are fantastic!
You might be worried that your kids will think you are a Scrooge
Don’t be. When amped-up activities become the norm, they stop feeling special.
Allow the natural rhythm of highs and lows that we observe in nature to play out in our everyday lives.
That way, when we do something special, it really does feel special
This is a vital life lesson that carries on into adulthood.
That buzz that comes from something exceptional and rare.
Marry that with the low hum of contentment that comes with the simple pleasures of togetherness.
If we can follow this recipe during Christmas, we have won the lottery of life.
So, with that message in mind, here are some ideas for Christmas traditions on a budget.
Camp Out By the Tree
On the first night you’ve decorated it, get the sleeping bags out and camp out under Christmas tree.
This is a magical way to enjoy your hard work. The little ones will cherish those memories for years to come.
Keep the lights on and watch them twinkle and glow while you read some Christmas themed bedtime stories.
As the kids grow older they can watch ‘The Nightmare Before Christmas’, ‘Home Alone’ and other fun movies.
It’s totally free and there are no pesky queues to endure for this beautiful light show!
It’s a free and fun way to bring Christmas cheer every day during December. There are hundreds of ideas out there to fire up your imagination.
My advice: make a plan for every 25 elf-on-the-shelf, and get your supplies way ahead of time to manage your stress levels : )
Neighbourhood Christmas Light Displays
A lovely activity to do before dinner on those long winter evenings.
Drive or walk around your neighbourhood to enjoy the neighbours’ Christmas light displays.
Local Garden Centres
Many garden centres have stunning and interactive Christmas displays for free. I even saw one with a children’s steam engine ride.
They often do an affordable Christmas meal if they have a restaurant.
Christmas Interviews
If your kids are old enough have them make Christmas interviews of each other and of all the family members.
They’ll enjoy playing the role of director and editor.
Make it an annual tradition and see how the interview responses change over time.
Family Christmas Baubles
Buy a new Christmas bauble every year, but get an identical one for each kid.
You can get great bargains on baubles in the January sales.
Store the spares for safekeeping. You can accumulate a beautiful collection over time.
When they’re adults, give them their baubles so you’ll each have one of the same.
They’ll have a piece of home recreated in their new lives.
Track Santa’s progress online as he delivers the toys to girls and boys across the globe on the Santa Tracker.
Family Donation Drive
Teach the kids the gift of giving by going through their clothing for a Donation Drive
Christmas Baking
Spend a couple of Sundays whipping up some baked delights to share with friends and neighbours to spread good cheer.
It will make your home smell delicious.
Home-baked treats are a budget-friendly Christmas gift (see above).
Cooking teaches kids responsibility. Baking is a fun low-cost Christmas activity. Sugar makes people happy.
Need I go on?
Christmas Eve Books
Jolabokaflod or ‘the Christmas Book Flood’ is a beloved Icelandic tradition where families and friends gift books to one another on Christmas Eve.
They then snuggle up with a warm drink and read well into the night. What a lovely way to pass the time when it’s cold outside!
Milk and Cookies for Santa
Finally, don’t forget to leave carrots for Rudolph and a glass of milk and cookies or mince pies for Santa on Christmas Eve!
That’s a (Gift) Wrap
So that’s it from me on how to save money at Christmas.
What works best for you when saving money for the holidays? Hit me up with comments!