I'm Karen!

I am a blogger and finance coach. My specialty is helping couples get on the same financial page and win with money and marriage. 


Personal Finance


Financial Planning

 Christmas on a budget

The cost of living crisis, the rising of energy bills are all bad news for our wallets. So with Christmas fast approaching, we need to be careful with our money and try are best not to get into debt. This is exactly why we need to celebrate Christmas on a low budget!

As per data from the Bank of England, households were projected to spend an average of £740 more in December than any other month, illustrating that Christmas spending results in a 29% surge compared to an ordinary monthly budget.

So, how can you manage Christmas without breaking the bank? While it’s not mandatory to adopt an ultra-frugal Christmas budget, it certainly pays off to strategically manage your finances. Prepare in advance, create a budget, and ensure you have access to the necessary funds.

With a sprinkle of budgeting advice and a dash of creativity, you can have a great Christmas without waking up to a financial nightmare.

Here are some valuable tips to help you shop wisely and celebrate Christmas on a budget:

Start saving in January!

Just a few years ago, we started a sinking fund for Christmas. Read my blog on What are sinking funds? Incorporating sinking funds into our monthly budget has been a real game changer for us, and every January, we start putting money aside for Christmas. It soon adds up and we are sure glad that we have that money to spend at Christmas… it certainly saves putting it on the credit card and paying for Christmas in the New Year! 

Create a Budget

The money that you have saved since January, will determine your Christmas budget and how much you can comfortably spend on gifts, decorations, and celebrations without straining your finances. Stick to this budget as closely as possible.

If you need helping with budgeting, then read my blog Why Budgeting Is Essential. It will not only tell you why budgeting is crucial, but will also explain how to budget.

How can we celebrate Christmas on a budget?

January Sales

Another one of my top tips is to buy Christmas cards, wrapping paper and other fun seasonal merchandise in January. You can find many bargains to be had in the January sales! One word of advice: don’t forget where you keep them! My Mum did this once and completely forgot where she put them!! 

Homemade Gifts

Consider making thoughtful, homemade gifts. Handcrafted presents are not only unique but also cost-effective. From DIY candles to personalised photo albums, there are countless creative ideas to explore.

Homemade Gifts from Children

This is a real win for family members. Many of our family really don’t need or even want anything, so when the grandchildren create a gift – no matter how messy or scribbly it may be, they love it and the handprint painting still sits pride of place on the wall… 13 years later! 

Secret Santa

If your family or group of friends is getting too large for everyone to buy gifts for everyone, suggest a Secret Santa gift exchange. This way, you can focus on getting one meaningful gift instead of multiple, often less personal, ones.

Or as an alternative to Secret Santa, over the last two years we have played the White Elephant Game. At first I was a bit sceptical but it was great fun! Here’s how you play: 

Each participant supplies one wrapped gift, usually of similar value.

The gifts are placed in a central location, and participants determine in which order (often by numbers randomly drawn prior to the start of the game) they will take turns selecting a gift. 

The first person opens a wrapped gift, and the turn ends.

On subsequent turns, each person has the choice to either unwrap a new present or to steal another’s. When a person’s gift is stolen, that person can either choose another wrapped gift to open or can steal from another player.

Each gift can only be stolen twice per game. The game is over when everyone has a present. 

At the end, the first player may, if desired, steal any gift – according to some rules, even a gift that is out of play.

Online Shopping Deals

Keep an eye out for online sales and deals, especially during Black Friday and Cyber Monday. Many retailers offer substantial discounts during these periods, helping you save on gift purchases.

Start Early

Don’t wait until the last minute to start your Christmas shopping. Starting early gives you more time to look for the best deals and make thoughtful choices, instead of rushing to buy whatever is left. We start buying Christmas gifts in September and it sure does save stress in the run up to December 25th! 

Regift Wisely

If you receive gifts that you don’t need or want, consider saving them as potential presents for someone else. Just be sure to avoid regifting within the same social circle to avoid any awkward situations.

Decorate on a Budget

Decking the halls can get pricey, but it doesn’t have to be. Consider buying decorations on clearance after the holidays for the following year. You can also create DIY decorations using materials you already have at home.

Reuse and Recycle

It might seem like common sense, but it’s worth emphasising: strive to avoid purchasing new items. You likely already possess a Christmas tree along with all the festive decorations you need. Chances are, a wreath is already hanging on your door. While the allure of new purchases may persist, remember that you don’t have to succumb to it.

We have a plastic tree. It has been a great investment as it has lasted years and we paid less than £20 for it so every year that I get it out of the cupboard, I feel that we’re winning! 

Bring and Share Dinners

We often have 20 plus people for Christmas dinner. It’s great fun and one of the best things about having so many guests is that they all bring a dish to share. A few weeks before Christmas, we get together and decide who’ll bring what dish. This not only eases the financial burden but also makes the event more inclusive and enjoyable for everyone.

I should also add that we ask everyone to bring their own drinks: soft drinks and alcohol. 

I also ask everyone to bring a tea towel – as everyone helps with the washing up! 

Thankfully, everyone is aware that we are on a budget and they are more than happy to bring and share. 

Consider Experiences

Instead of physical gifts, think about gifting experiences. A cooking class, spa day, or tickets to a concert can create lasting memories without cluttering your home or draining your wallet.

Give the Gift of Time

Offer your time and assistance as a gift to your loved ones. Whether it’s helping with household chores, babysitting, or providing a service, these gifts can be more meaningful than physical items.

Enjoy Cost-Free Viewing

Christmas is synonymous with quality television, but there’s no need to strain your wallet. Many streaming services extend complimentary one-month trial subscriptions. Sign up in December, and you can indulge in the comfort of your home with family-friendly movies. Just make sure to cancel your subscription before the trial period concludes.

Use Points

If you’ve been accumulating credit card points, consider reserving them for the holiday season, specifically for covering expenses related to Christmas, such as groceries or purchasing gifts. You can exchange these points for gift cards, effectively allowing you to go shopping without dipping into your wallet, well, almost. Take advantage of the excellent deals offered during Black Friday and Cyber Monday Weekend to make the most of your points when purchasing your presents.

Cut Down on Shipping Expenses

Shipping fees can quickly accumulate. If you anticipate frequent use of a particular platform, explore the option of delivery passes. For instance, ASOS offers a year-long premium delivery service for just £10, while Amazon Prime provides a monthly plan at £7.99, with the first 30 days coming at no cost.

Seek Expert Guidance

When it seems like the only option for you and your family this Christmas is to dive into debt, pause and consider seeking professional advice first. Consulting with a financial advisor can be instrumental in helping you devise a comprehensive plan, offering guidance on managing credit cards and overdrafts, and ensuring you don’t undertake more financial burdens than you can manage.

Leverage Loyalty Programs

Many retail loyalty programs can lead to substantial long-term savings. If you’re already a member of loyalty programs for your favourite stores, think about redeeming your accumulated rewards in December to alleviate your Christmas shopping expenses. If you haven’t joined these programs yet, it’s an opportune time to sign up, enabling you to offset those additional holiday costs and accumulate points for future cost savings.

By incorporating these tips into your holiday planning, you can enjoy a magical Christmas without the worry of overspending. It’s all about creating beautiful memories and spreading joy, not about breaking the bank.

Thinking ahead to the New Year…

No doubt about it, Christmas can be quite a drain on your finances. It is my hope that you don’t go into debt to get through Christmas, however, if you do, consider these strategies for your January comeback:

Unwrap Your Christmas Bonus

If you happen to receive a Christmas bonus from your employer, refrain from automatically adding it to your December spending pool. If possible, set aside a portion, or even the entire bonus, to provide a financial boost in January. Alternatively, you can use it for making a mortgage overpayment or contributing to your pension.

Embrace Dry January

Many people who indulge during the Christmas season opt for a “Dry January,” abstaining from alcohol for the entire month. Besides the health benefits, this can contribute to the recovery of your bank balance.

Minimise Waste

If you find yourself with surplus Christmas food, plan ahead by freezing it for January meals. Additionally, for gifts that you don’t see yourself using, consider exchanging them for something you genuinely need or sell them online. This way, you can make the most of your holiday resources and finances.

Get inspired for the New Year!

I love Setting Goals and there’s no better time than the New Year to do this. Over the years, I have spent a lot of money on Goal Planners, but none of them ever really met my needs. So, recently I created my own Goal Planner! I love it! It has space for you to write specific goals for each month, with a reflect and review page at the end of each month too. It has motivational quotes and space to record your notes. 

If you are ready to visualise your biggest dreams, then use the 2024 Money and Marriage Goal Planner to craft and monitor your objectives all year long. This updated planner is equipped with tools designed to maintain your concentration on your priorities. With a touch of self-care and strategic planning, you can turn your dreams into tangible achievements.

Check out The Money and Marriage Goal Planner 2024, your future self will thank you!

If you would like to invest in yourself and work with me to improve your current financial situation, I offer a FREE Q&A call (no obligation!) if you would like to find out a bit more about the benefits financial coaching can offer and how I might be able to support you.

Every client who has ever invested in coaching with me, has become more financially stable and money confident as a result. So leave a comment below or email me today hello@moneyandmarriage.net and let’s book a call!

  1. Magdalene says:

    I started saving a token per week for Christmas and I understand the sinking funds. Thank you for your tips

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