Making the most of your money in the run-up to Christmas

As the festive season approaches, many of us find ourselves under financial pressure, wondering how to make the most of our money, while trying to have a fun Christmas. Thankfully, there are plenty of strategies to help you stay on top of your finances without sacrificing the holiday spirit.

Here are some tips on how to save, plan, and spend wisely in the lead-up to Christmas, inspired by insights from a recent webinar hosted by Karen Taylor and financial expert, Maddy Alexander-Grout.

Start early and plan ahead

One of the most effective ways to save money during the holidays is to start early. Many people begin their Christmas shopping in December, only to find themselves scrambling for last-minute gifts and dealing with inflated prices. According to Maddy Alexander-Grout, a seasoned financial coach, the best time to start preparing is in January when post-holiday sales offer significant discounts. However, it’s never too late to begin planning now to avoid overspending later.

To organise your budget, make a list of everyone you need to buy gifts for and set spending limits for each person. Ask yourself whether you really need to purchase a gift for every individual on your list. In some cases, a thoughtful card or a smaller, personalised gift may be just as meaningful as an expensive present. Maddy emphasises the importance of setting boundaries and communicating with loved ones about expectations for gift-giving. They may even appreciate the gesture of reducing costs, especially if they are also watching their budget.

Leverage saving tools and cash pots

Creating a dedicated savings plan for Christmas expenses is another effective strategy. Maddy suggests setting up savings ‘pots’ with tools like Revolut, Starling, or Monzo, where you can allocate small amounts of money towards specific goals, such as gifts, food, and decorations. By setting aside a portion of your income regularly, you’ll be better prepared for the holiday season without having to dip into your main account at the last minute.

Additionally, utilising apps like Plum, which offers features such as rounding up spare change or depositing extra money when it rains, can help you save in small increments that add up over time. Physical cash binders, which allow you to separate savings into envelopes for different purposes, can also give a tangible sense of progress as your Christmas fund grows.

Find deals but stay cautious

Sales and discounts are plentiful in the weeks leading up to Christmas, particularly around Black Friday and Cyber Monday. However, Maddy advises shoppers to approach these deals with caution. While it might seem like a great time to grab bargains, not every deal is truly a discount. “You’re not saving money if you didn’t plan to buy that thing in the first place,” she warns. Maddy recommends using tools to track prices ahead of sales to ensure you’re getting genuine savings. Websites and apps like Trolley.co.uk can compare prices across multiple stores, helping you find the best deal on specific items.

Additionally, keep an eye out for scams, which become increasingly common during high-pressure shopping periods. Make sure to verify the legitimacy of websites, especially if deals seem too good to be true, and avoid unfamiliar websites without secure payment options.

Make the most of second-hand and pre-loved items

Buying second-hand items can be a great way to save money and reduce waste. Maddy is a strong advocate of thrift shopping, car boot sales, and online platforms like Vinted and Facebook Marketplace. She shared her own experience of buying two second-hand scooters for her children, which they loved and used regularly. Often, pre-loved items are in excellent condition and come at a fraction of the price. Maddy also suggests adopting a “one in, one out” rule, where you sell items you no longer need before buying new ones, helping to declutter your home and fund new purchases.

Be mindful of buy now, pay later options

While buy now, pay later (BNPL) schemes like Klarna and Clearpay can be useful in spreading the cost of large purchases, they should be used carefully. Maddy advises against using BNPL for multiple small purchases, as the cumulative monthly payments can quickly add up and become unmanageable. If you decide to use BNPL, keep it to one or two larger items and ensure you have a clear plan to pay them off in full before interest kicks in.

Save on Christmas dinner and entertaining

If you’re hosting Christmas dinner, the costs can quickly escalate. Maddy suggests saving up supermarket loyalty points throughout the year and using them to offset the cost of the big meal. Programmes like Nectar Points and Tesco Clubcard can make a significant difference if you’ve been accumulating points all year. Also, consider apps like Too Good To Go and Olio, which offer discounts on food that might otherwise go to waste, helping you save on ingredients.

Additionally, planning your food shopping in advance and stocking up on non-perishable items early can help avoid price hikes closer to Christmas. Supermarkets often mark-up seasonal goods as the holiday nears, so buying staples like crackers, crisps, and canned goods ahead of time can help you stay within budget.

Don’t overlook free or low-cost activities

Christmas doesn’t have to be all about expensive gifts and outings. There are plenty of ways to enjoy the festive season without spending a fortune. Local community events, crafting workshops at libraries, and smaller, local performances of pantomimes can be more affordable alternatives to big-ticket shows or attractions. Maddy also encourages finding low-cost or free ways to engage in festive activities with children, such as visiting Father Christmas in smaller local venues rather than paying for more commercial experiences.

With a little planning, budgeting, and creativity, it’s possible to enjoy the holiday season without overspending. Whether it’s making use of discounts, shopping second-hand, or starting your Christmas savings early, there are plenty of ways to make your money go further while still creating a memorable and festive Christmas for yourself and your loved ones.

If you’d like support with your financial wellbeing, you can book an online consultation with one of our financial coaches. Click below to learn more:

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