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How to have a budget friendly Christmas

Christmas doesn’t have to be an expensive time of year. You could have all the festivities without spending a fortune!
Christmas tree with baubles | Wealthify
Reading time: 5 mins

Did you know the average Brit spends up £1,116 on Christmas[1] each year? That’s a huge amount of money, and often it’s confined to just one month – December, where typical household spends an extra £800![2] And then there are the November temptations of Black Friday and Cyber Monday sales, which continue to drive up our spending at this time of the year.

It may seem like having an affordable Christmas is out of reach, but that’s not strictly true. In fact, just like with every other budget you put in place, with enough planning and a bit of realism, you could have an excellent Christmas on a budget without being accused of being a Scrooge!


Santa Claus is coming to town
Santa is brilliant because he can deliver presents all over the world in a single day, but to us mere mortals, this is impossible. What we can do instead, is plan the year ahead. We know when Christmas is, we probably know who we’re going to buy presents for, and we might even have some room in the freezer for tucking away some party foods.

Planning for Christmas in advance could help spread out your costs, spending a little bit each month rather than having it all land at one time. It also allows you to pick up presents when they go on sale at different points throughout the year – for example, after Christmas – potentially picking up some real bargains.


Last Christmas, I gave you…
Buying presents for everyone may seem like a generous thing to do, but it might be a little bit much. If you’re set on doing this, then it may be a good idea to put a price limit on gifts. You could put a monetary cap on it, for example, £10-100 per person depending on your finances. If you find this too difficult, then maybe you could limit the number of presents you get someone - one big present and three to five little ones. Even if you don’t rigidly stick to this, it may help to control your Christmas spending urges.

It may also be worth thinking about the environmental impact you’re having. Typically, 41% of children’s toys are broken within three months – heading straight for the landfill, along with 125,000 tons of plastic packaging generated by Christmas purchases.[3]

If you have little children, then you may want to consider an Ethical Junior ISA, giving them a present for the future that delivers a positive impact on society and the environment now. It may not be much fun for them to play with now, but it may help them to buy their first house later on.


Bigger isn’t always better
Sometimes a smaller event can be more fun, as there’s less stress and expense attached to it. Instead of making Christmas dinner with all the trimmings, why not just buy what people actually eat? That means you can probably ditch those dreadful brussels sprouts (opinion of the author and in no way a recommendation by Wealthify).

And although this is a time for feasting, you might be able to save money and waste by preparing a smaller-than-usual Christmas dinner. This could be a good idea if you find yourself throwing away half a turkey each year after having leftovers that could last you till New Year.


Give to charity
Have you noticed that you seem to be buying presents for more and more people? Maybe your friendship circle is widening, someone bought you a present last year, and now you feel obligated to get them one, one of your friends has had a baby… the list goes on. The more people you buy for, the more expensive it can become.

Instead of heading to the shops or endlessly scrolling online for a possible present, why not look at giving to charity instead? From a budget-friendly point of view a £50 donation could be less than what you were planning on spending, and from the giftee’s point of view – you’re helping a very worthy cause. Nobody will argue with that! If you want to add a bit more humour to it, Oxfam do a great range of gift cards, including a pile of poo and even a life-changing chicken!


Sell your old stuff
Many people have a clear out around Christmas, often to make sure there’s room for the new presents they’re expecting. But as people are also Christmas shopping at this time, it could be a perfect opportunity to turn your unwanted goods into someone else’s treasure!

There are plenty of websites that let you list and sell your items easily, whether it’s your old clothes that you no longer wanted or children’s toys that your kids have outgrown. While you might not make enough money to cover your Christmas expenses, it could be more profitable than throwing those items away and could give them a second lease of life.


Use your loyalty points
If you do your grocery shopping with Tesco or Sainsbury’s, you may have amounted quite a few points throughout the year. Why not use them at Christmas to pay for the big Christmas shop? You know the one, plenty of prosecco, party food, nibbles, and treats. While you may not have enough points to buy it all, it may help to reduce the cost enough to make it feel like more of a ‘normal-sized’ shop. Alternatively, you could use these points for experience vouchers which you could then gift to friends and family.


Go for a day out
Did you know that many places around the UK have things to do over Christmas? This means that instead of staying in the house wanting to unwrap and play with toys, you could distract your little ones with a fun day out. From enjoying winter wonderlands to watching festive films, you may be surprised at what’s available – often at low cost and sometimes even for free!

This could also be a lovely present throughout the year, planning a day out each month with the family. This way, you could include the price of the present within your monthly budget, which would spread out the cost and make December that little bit cheaper for you!



1: https://yougov.co.uk/topics/lifestyle/articles-reports/2019/12/16/average-brit-spends-1116-christmas

2: https://www.bankofengland.co.uk/knowledgebank/how-much-do-we-spend-at-christmas

3: https://www.independent.co.uk/environment/green-living/high-environmental-price-of-a-very-merry-christmas-429635.html


The tax treatment depends on your individual circumstances and may be subject to change in the future.

Please remember the value of your investments can go down as well as up, and you could get back less than invested.

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