How to save for Christmas

While Christmas feels like it is a long way away, we need to start thinking about it again. It is a time of joy, family and gift giving; but it is also a time of raiding our savings. We need to take a more proactive approach to how we fund our Christmas spending. This is why I have decided to start saving well in advance so that I have a fund available at the be beginning of December to draw from.


  • Why should we save for Christmas?
  • How much do you need to save?
  • Separate your savings
  • Save when you shop
  • Methods of savings
  • What is my savings plan

Why Should We Save for Christmas?

Last Christmas (2020) it is estimated that Brits spent £24.2 billion on Christmas which equates to an average of £476.05 per person. This is, however, down on 2019 where we spent £26.9 billion or an average of £513 per person. Assuming that this year we will be able to beat covid-19 I would expect this years spending figures to be closer to that of 2019.

This is a lot of money to spend when not properly budgeted. Do you have a spare £513 laying around that you can draw on in December? If you do, great! However, the reality is that many families will dip into long-term savings or worse, take on debt to fund Christmas. This needs to change!

If we take a more proactive approach towards Christmas not only could be be more financially confident, we could also save a lot of money. As part of your regular budget you need to start putting money aside each month, it doesn’t need to be a lot, and by December you could have a decent amount to help fund the Christmas your family deserves.

How much do you need to save?

To start with, this is a highly subjective question. How much I need to save could be different to how much you will need to save. I spent around £509 last Christmas, of which £220 was spent on travel (petrol and ferry).

My spend figure for last Christmas is around average according to the data above. In order to know how much you will need to budget for next Christmas, it is worth taking a look through you bank statements between the the start of November and end of December. By doing so you will be able to get a good picture of how much you have spent and from there we can begin to plan.

Once you have figured out how much you have been spending, it is time to start thinking about a budget. Do you want to put a spend limit in place? Or you could have an overall lump-sum budget in place. When you have an idea on how much you think you will need to save, it is time to incorporate this savings goal into your budget.

Separate Your Savings!

As will all things budget related, you should separate your Christmas savings fund from your long-term savings, this is easy to do. You can open a new savings account or save in cash. I have opted to save in cash.

The reason why it is important to separate your savings is, firstly so that you can easily track your progress, second, so that you are not tempted to accidently dip into the funds for everyday spending. Additionally, people in general struggle to save throughout the year, having separate accounts focuses you on your savings goals in order reach them.

Save When You Shop

If you regularly shop at the same supermarkets, see if they have a rewards scheme. Good examples of rewards schemes include the Tesco Clubcard and the Morrisons More Card. With these schemes you will earn points per £1 you spend in store which you could eventually redeem for vouchers. If you save up these vouchers throughout the year, you could have a decent amount of value available for you to use. This could pay the Christmas food shopping bill.

Another perk of joining these schemes is you may earn additional points on certain products, or even get a special till price, e.g. Tesco club card price. So not only will you be saving your points but you could also be saving on your regular shopping trips.

If you wanted to go one step further, you could put the ‘money saved’ into your Christmas Fund. An easy way to work this out is to look at your till receipt and it will say how much money you have saved on offers. Just pay this amount into your Christmas fund and over time this will build up.

Methods of Saving

There are loads of different ways you can save up money to reach a goal, you just need to pick one that suits you. The most obvious and simple way would be to work out your savings goal, divide it by how many months away from your goal which will give you a monthly amount to save.

However, you can make saving fun. You can try savings games or goals and involve your family in it. By doing so you have to duel effect of not only saving the amount you need but you are involving your kids in the process, thereby teaching them about financial responsibility. Make saving a challenge by doing a 52 week challenge, or you can turn it into a competition with your kids by asking who can save the most money.

The important thing to do is to find an effective method which will allow you to save your goal amount of money. The more people you involve in your family the easier it will be, and you might teach the kids something too.

What is My Savings Plan?

As mentioned at the beginning, I am saving for next Christmas because I don’t want to get caught out again by how expensive it is. So how am I doing this?

The method I have chosen is simple, between the beginning of January and the end of November I am putting £10 into an envelope every Monday. By doing this, I should have at least £480 to spend in December for Christmas. I have also created a tracker on a spread sheet to keep track of how I am doing, and to see how much I have saved. If I have spare cash I might now and then put a little extra in.

None of the content in this article should be considered financial advice, I am not a financial advisor and you should always do your own research prior to investing. These are my opinions only.

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