Families spend an average of around £820 on Christmas according to recent research from VoucherCodes and the Centre of Retail Research. Many households have put their Christmas on credit – but with some planning ahead, it may be possible to build a pot of cash and make savings here and there which will stop you forking out more than you need to. 

Sarah Coles, a personal finance analyst at Hargreaves Lansdown, says: “Around one in three people end up putting Christmas on credit, which can prove expensive. Grab the opportunity to put some cash aside earlier in the year, and use a few cunning tricks to boost your Christmas savings, so you can celebrate the holidays without breaking the bank.”

10 ways to save money for Christmas

Here are Coles’ 10 top tips for building up a money pot for Christmas. 

1. Save money each month

Save money

Set up a standing order to put money into a savings account as soon as you are paid each month, so you’re not tempted to spend your Christmas savings.

2. Consider microsavings

There are a number of approaches you could take. Some banks allow you to round up each spend to the nearest pound and save the rest, while some apps regularly take small sums of cash from your current account and put them into savings for you. The idea is that they’re so small, you don’t miss the money, but large enough to add up.

3. Switch current accounts

Some current accounts offer good interest rates, while others will give you a bonus for signing up – to kick-start your Christmas savings. It’s not a good idea to switch for a bonus alone, but if the account itself suits you, it’s a nice extra for Christmas.

4. Have a pre-Christmas clear out

Have a look through the cupboards for old presents and things you haven’t used since last Christmas. If you sell them on auction sites or specialist sales sites, you could raise a handy lump sum.

5. Try trading down brands

Save money shopping for christmas

If you buy branded goods, try the own-brands. If you buy own-brands, try the basic range. Alternatively, give a discount supermarket a try. You’re unlikely to like everything you try, but you may find everyday savings you can take advantage of for life – and in the interim you can cut your grocery bill by 10% or more and put the savings aside for Christmas.

6. Cut out the small luxuries for a couple of months

This doesn’t have to involve a major sacrifice, but if you were to drop a family takeaway once a week, a daily coffee, and a drink after work on Friday, you could put aside an extra £200 a month, which would boost your Christmas savings nicely.

7. Start with the budget – not the wish list

Once you’ve established your savings strategies, you’ll have an idea of what you can afford to spend: This is where you start – not the big list of things you ideally want to buy. If you don’t have enough cash to cover the wish list, you can then decide either to cut back on each gift, or chat to people you know well enough and agree not to buy for one another this year. Who knows, they may be just as relieved by the idea as you are.

8. Cashback websites

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Sign up to one or two cashback websites, and whenever you shop for anything between now and Christmas, you’ll get some cashback. The amount of cash will vary, but can be up to 15%. Even if you were to get 1% cashback on £500 of spending, it’s still a £5 voucher, which will come in handy.

9. Cashback credit card

This offers similar benefits, but comes with a major caveat: If there’s any chance you won’t pay this off in full and on time every month, then give it a wide berth – or you’ll quickly spend far more in interest than you’ll ever make in cashback.

10. See people in the New Year

Not only will this give you another pay day to cover the cost of their present, but it gives you the option of re-gifting if your budget is really stretched.

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