Money guide
How to set a Christmas budget (UK): a simple 5-step plan
Christmas spending rarely goes wrong in one big moment. It creeps: an extra present here, a bigger food shop there, a night out you had not planned. A budget set before December stops the creep, and it stops January turning into a month of catching up. Here is a simple way to do it.
1. Work out what you can actually afford
Start with what is left after your December bills, not with what Christmas usually costs. Then look ahead to January. Many UK employers pay early in December, so the gap until January payday can be five weeks or more, and January bills still arrive on time. Whatever you spend on Christmas has to leave enough to get you through.
2. Pick one total and write it down
Choose a single number for the whole of Christmas: presents, food, travel, everything. One number is easier to stick to than a dozen vague ones. If you share a home, agree it together.
3. Split it into categories
Divide your total between the things Christmas actually costs. As an example, a £500 budget might look like this:
- Gifts: £250
- Food and drink, including Christmas dinner: £120
- Travel and fuel: £40
- Nights out and parties: £30
- Decorations: £20
- Cards, postage and wrapping: £20
- A buffer for the things you forget: £20
Your split will be different. The point is that every pound has a job before you start spending, and the buffer catches the surprises.
4. Plan gifts person by person
Write down everyone you are buying for and give each person a budget before you go shopping. If the list is long, suggest a Secret Santa or a spending limit with family and friends. Most people are relieved when someone else says it first.
5. Track as you go, and plan January now
Note every Christmas purchase as you make it and keep the receipts for returns. If you use a credit card or buy now pay later, write down when the repayments start, so the January statement is not a shock. Check that your January bills are covered before the big shop, not after.
If money is already tight
If you are worried about debt or can not see how January will work, StepChange (stepchange.org) and Citizens Advice (citizensadvice.org.uk) give free, confidential help. This guide is general information, not financial advice.