How much money will you spend this Christmas?

It’s hard to believe that it’s almost time to start thinking about Christmas again. 2021 has been a strange year that in many ways has felt somewhat timeless. With the combination of Covid restrictions and unseasonal weather, months seem to have drifted into each other without us ever quite knowing where we are.

But now autumn is fast approaching, which means Christmas won’t be far behind. So in this article we take a look at what you can start doing now to prepare for Christmas, and in particular how you can ensure that you will have enough money for Christmas.


How much does Christmas cost?

Despite all our good intentions, most of us probably overspend at Christmas. Which can mean that we then have to spend the next few months helping our finances to recover.

But how much does Christmas actually cost?

It’s a difficult question to answer because Christmas 2020 was far from typical. Many people spent less than usual because of Covid restrictions. We were not able to see family and friends as usual, shops and businesses were often closed, and for many of us money was tight due to jobs being lost or furloughed.

Rewind to Christmas 2019, and the average amount of money an adult spent on gifts in the UK was around £500. Add to this the costs of food, drink, social events and travel, and it would be very easy to fork out around £1000 on Christmas without realising.

Whilst no-one wants to be a killjoy, this money needs to come from somewhere. So it’s important to plan ahead to have enough money for Christmas, otherwise the risk is it will all end up going on a credit card and having to be repaid with interest on top.


How can you plan your Christmas spending?

There are three things that you need to do to work through this:


  • Plan what you are doing

The first thing to do is to decide what you want to do this Christmas. This can be a minefield for many families, but it’s best to get things sorted earlier rather than later. So you need to have some conversations within your family about who is hosting what, and who is going where and when.

There will usually be compromises to be made, but also try to make sure that you use part of the time to do the things you really want to do, and also that you factor in all the extra Christmas events such as work parties and school Christmas plays and carol services.


  • Create a Christmas budget

Before you start any kind of Christmas spending it is well worth sitting down and making a list of absolutely everything you need to buy. The most obvious category is gifts, but also include food, drink, decorations, cards, postage, travel and social events. Make your best estimate of how much money you think you will need to spend on each of them.

You may well be horrified at the total amount, but it is better to know in advance when you can do something about it, rather than count the cost afterwards.


  • Start your Christmas shopping early

It can be a real benefit to start your Christmas shopping early, because you will then avoid last minute panic buying so are more likely to stay within your budget. It also gives you the opportunity to buy your gifts at a wider variety of places where you may be able to save money, for example retail outlets, online auction sites, and charity shops. 

It is also a great idea to start thinking about your Christmas recipes and food shopping, because there are many items that can be bought or prepared in advance. If you start buying one or two Christmas items every shop from now on, you will soon start building up a good supply without noticing the cost too much.


How to avoid overspending this Christmas

But what happens if you do all the above and realise that you don’t have enough money for Christmas

There are really only two main ways to deal with this without overspending or taking on debt:


  • Reduce your spending

The advantage of having a Christmas budget is that you are also able to change it. So if your planned spending is more than you can afford right now, then have another look to see what you can reduce.

You can still have a great time even if you decide to spend less on gifts and socialising. Why not discuss spending limits on gifts with family and friends, or agree to just do presents for the children and maybe a combined Secret Santa for the adults. Many people will be in the same situation post-pandemic, and would probably welcome taking a different approach.

And Christmas socialising doesn’t have to involve expensive hotels or meals out. Gathering in homes for drinks and nibbles, potluck suppers or shared takeaways can be just as much fun at a fraction of the cost.

So it may well be possible to reduce your amount of spending money for Christmas without spoiling anything.


  • Increase your income

The other way to balance your Christmas budget is to find a way of bringing in a bit more money, even just on a temporary basis. It may be possible to pick up some extra seasonal work, especially in the hospitality or retail sectors, or to offer your services locally for babysitting, pet sitting or a variety of domestic jobs.

Another option could be to have a go at selling unwanted goods. Our article Could you make cash from your attic? contains plenty of hints and tips about how to declutter your home and where to sell items that you no longer want.


We hope that this article will help you to plan ahead and take the necessary steps to ensure that you have enough money for Christmas. So that when Christmas does arrive, you’ll be able to sit back and enjoy it, without any stress or money worries.

Meanwhile, do check back here soon for more lifestyle and financial tips from Advantage Loans.