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How to have a brilliant Christmas on a budget

how to do christmas on a budget
7 clever ways to cut back this Christmas John Lewis

Christmas might be the most wonderful time of the year, but it can also be one of the most expensive. With the cost of living crisis tightening its grip on households around the UK, this festive season may be harder than ever before.

Financial experts have always talked about the importance of budgeting in the lead-up to Christmas, but as the price of everything soars, tightening the purse strings has never been more important. While certain costs, such mortgage payments or rent, are simply immovable, there are certain swaps you can make to avoid giving yourself a financial hangover.

Keep reading for everything you need to know about doing Christmas on a budget...

1. Prioritise your expenses

First things first: make a list of all your festive expenses and prioritise each one. Decide what's important to have (food, for example) and what's a nice-to-have treat. Your list of expenses should include everything from presents to Christmas cards, decorations, special treats, stocking fillers, meals out and new clothes. You might find it helpful to go back through last year's bank statements to see what you purchased.

Once you have your list, it's time to check it twice. Brean Horne, Personal Finance Expert, at Nerd Wallet, advises: 'Prioritising your Christmas spending can help you cut costs and save money. Split your expenses into essential and non-essential costs. Where possible, try to find cheaper alternatives or cut down on your non-essential costs. For example, hosting a dinner party instead of going out for a meal, or finding free Christmas events.'

christmas tablescaping trend   scandi
House Beautiful/David Loftus

2. Set a budget — and track your spending

Budgeting is a great way to keep track of your festive spending. According to analysis conducted by Finder, the average British adult forked out £548 on Christmas gifts last year — an increase of £72 from 2020's budget of £476. That's even without factoring in the cost of food, decorations and entertaining.

'Whether you prefer jotting the figures down in a notebook or creating a spreadsheet online, note down all of the costs you'll need to cover over the festive season such as food, presents, decorations and travel,' continues Brean. 'Remember to factor in any events or outings you might attend including Christmas parties or visiting a local Christmas market.'

Once your budget has been set, don't forget to keep note of what you spend. Writing down everything you buy – whether that's online or in stores — will help you keep up with all that shopping as you go.

'Many people get whisked away with the buzz of the festive season and forget to check in with their budget,' says Salman Haqqi, Personal Finance Editor at 'Future you would be much happier if you track your expenses as you go, so you don't end up overspending and ruining this month’s and next month’s budget.'

christmas tree baubles
Polly Wreford/House Beautiful

3. Shop smart

Doing Christmas on a budget involves shopping smart. Salman recommends combining your online orders to avoid paying excess delivery costs (and choosing places with free delivery), while he also suggests seeing if you can get discounts with your current account when you spend at specific shops.

He explains: 'If your current account doesn't offer any benefits, you might want to consider switching to a more competitive account. Many banks will also offer an initiative for you to switch, like a lump sum of cash. These can help you save money on your spending this Christmas.'

Black Friday (Friday 25th November 2022) and Cyber Monday (Monday 28th) may be helpful for some deals, but only buy what you really need. If you use sales for the things you were already planning to buy, you can certainly save money.

4. Plan your meals – and swap to supermarket own brands

Reduce food waste at Christmas by planning your meals. Leftover turkey sandwiches might be a Boxing Day highlight, but meal prepping and planning is a great way to keep supermarket costs low. The experts recommend doing this for everything over the holidays, including Christmas dinner, drinks parties and savoury snacks.

'It's very easy to get carried away and fall into the trap of buying small bits for your Christmas dinner,' says Abigail Yearley, spokesperson for 'Be sure to sit down and put together a meal plan, to work out what you'll be making and how many people you'll be catering for, so you know exactly what and how much of it to buy.'

Once you've worked out what you need to buy, why not see if you can swap to supermarket own brands. In most cases, you are unlikely to notice any difference.

why is it called boxing day, christmas decorated table
House Beautiful/Rachel Whiting

5. Try Secret Santa with a small budget

One of the many pluses of Secret Santa is only needing to buy one gift without carrying the heavy price tag of buying for everyone. Our unwanted gifts are totalling to some £5 billion combined, according to Finder, which is why a well-organised Secret Santa is always a good idea.

'Christmas shopping can get very expensive if you're buying for lots of family and friends, so why not try taking Secret Santa out of the office this year,' says Salman. 'Put names into a hat and have everyone pick out one person to buy for. Ask people to write down their top three preferred gifts and you're already on your way to a quicker and cheaper Christmas shop.'

Want to cement your reputation as the best gift-giver? We think homeware lovers would adore this Alphabet Initial Ceramic Plant Pot (reduced to £2.85) from Oliver Bonas , while this affordable Merry Christmas mug (£5) from John Lewis is ideal for hot chocolate enthusiasts.

this season's most beautiful christmas schemes will transform your home with stylea time of giving presents wrapped in beautiful hand  printed paper and tied with gorgeous ribbons are wonderful to give and receive
House Beautiful/Duchars Dan

6. Be savvy with your energy usage

Christmas can really bump up your energy bill if you're not careful. According to MyJobQuote, using the oven for five hours to cook a roast will equate to almost a week's worth of cooking in just one day. We're not suggesting you go without, but you'll be pleased to know there are some small things you can do to reduce costs.

'Why not ask your guest to bring a dish or two with them – not only will this reduce your energy usage, but it will also take the pressure off you,' suggests Abigail. 'Making a mental note to switch off any lights when you're not in the room or won't get any benefit from them is another way to reduce your energy bills. It might be tempting to leave the Christmas tree lit up all day, but a hefty bill at the end of December might not be worth it.'

how to do christmas on a budget
Martin Barraud - Getty Images

7. Shop secondhand

Spending too much on Christmas presents? Why not have a nosey around your local charity store to see what gems you can find. According to a study by Oxfam, 42 per cent of Brits were more open to thrift shopping last year than ever before, with 19 per cent adding that they would feel 'grateful' receiving a used gift as a Christmas present. Not only will it save you a pretty penny, but thrift shopping is great for the environment and could score you some vintage, one-of-a-kind gems.

'Festive intricate baubles can be expensive but charity shops are a great place for spotting decorations to fill your tree. You may even find a vintage bauble or two,' says Mitchell Baxter, finance expert at

8. Finally, don't stress

Christmas doesn't have to be perfect to be enjoyable. Our lockdown festivities certainly proved that. Whether it's a smaller Christmas tree (you can find our affordable tabletop trees here) or making your own dried fruit tree decorations, it doesn't matter how things look.

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